The Jin Cheng bank could grow its banking business rapidly in 1920-30s. In the growth of banking business, receiving and extending business play a very important. role in revalitalizing the banking business. The main causes that made it possible for a...
The Jin Cheng bank could grow its banking business rapidly in 1920-30s. In the growth of banking business, receiving and extending business play a very important. role in revalitalizing the banking business. The main causes that made it possible for a loan business of Jin Cheng bank to be revalitalize can be summarized as follow: first, Jin Cheng bank could effectively absorb a large amount of silver that began to be focused on the Chinese coastal area in 1930s. Jin Cheng bank could expand the loan business by relying on the abundant deposits. Second, Kumsung bank could expand its loan business by loaning a large amount of banking fund to the governmental offices in high interest rate. Everytime Chinese government issued the public bonds for the purpose of resorving the financial deficiency of governmant, Jin Cheng bank took a positive and active attitude to cooperate with the finacaial policy of Chinese government. Third, Jin Cheng bank took the policy to increase the banking profits by penetrating the bankfunds into the industrial world.
In 1930s, Chinese economic recession cause Jin Cheng bank to take the banking policy to penetrate the banking funds into industrial world as a means of making a profit in the extreme economic recess. Jin Cheng bank had invested a large amount of banking fund on the large size entrerprise to meddle in the management of enterprise as a main share holder. Besides, Jin Cheng bank tried to expand its financial influence over the industrial world by controling the management of inslovent enterprise through mergers and acquisitions, or establiinged the enterprise under the supervision of bank in order to make a profit.
Jin Cheng bank could succeed in coming up with the banking growth in economic recession in 1930s by penetrating banking funds into the industrial world, its loan business teended to be parcially done to maximize its profit. In other words, Jin Cheng bank loaned its banking funds, centering on the special enterprises that had deep relation with Jin Cheng bank, such as enterprisees that Jin Cheng bank was registered as main share holder by investing a large amount of banking fund, enterprises mergered by Jin Cheng bank, and enterprises established by Jin Cheng bank. The banking business of Jin Cheng bank had to be criticized in indulging in seeking for private interest of bank without regard of public good.