Zhou Xiaochuan, governor of the People's Bank of China, the central bank, said management of the rural credit co-operatives will be improved and the shareholding reform of the rural banks will be accelerated.

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"The property rights of the rural credit co-operatives will be further clarified and their corporate governance improved ... to make them community financial institutions to (better) serve farmers," he said when addressing the 26th meeting of the Standing Committee of the 10th National People's Congress.

Zhou also urged that the establishment of the rural postal banks be accelerated to make postal deposits play a larger role in supporting rural development.

He said agricultural insurance and farm produce futures should be developed to reduce the risks of farmers. Other rural financial innovations, including establishment of micro-credit organizations and legal private lending, should be encouraged, he added.

Since Chinese farmers still resort to small-scale individual farming, many financial institutions have found it too costly to provide services for them, leaving many in need of development capital.

The newly concluded central rural work conference and last month's central economic work conference called for more financial support for the rural areas.

Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), admitted that problems abound with the existing rural financial institutions.

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