OREANDA-NEWS. November 08, 2011. As the one-month trail run of the financial centralization ended, 311 tier-two branches of Agricultural Bank of China Limited (ABC) transferred the management of their finance to tier-one branches, which represented that ABC had accomplished its centralization of financial management by tier-one branches with "five centralizations" as the core, "five uniforms" as priorities and "four promotions" as the objective, reported the press-centre of ABC.

Mr. Pan Gongsheng, Vice President of ABC, stated that the centralization of financial management by tier-one branches was a new breakthrough of ABC's reform of financial management system with financial centralization as the core. This breakthrough was sure to exert favorable and significant influence on ABC's image promotion as a listed company and to boost the building of an outstanding large listed bank.

To enhance the budget control of branches, uniform financial accounting processes and standards, innovate financial accounting methods, promote informatization of financial management and resolve information asymmetry, ABC has launched the financial centralization of tire-two branches (city banks) since 2007 and has achieved favorable outcomes. In 2009, on the basis of experience sum-up and in-depth research and demonstration, ABC began to prepare for the centralization of financial management by tier-one branches and the establishment of supporting systems. In March 2010, pilot projects were started in Jilin Branch and Zhejiang Branch and completed in November 2010. Such centralization has been popularized around the Bank since this March. After the centralization, with the once nearly 400 financial control centers cut down to 37 across the Bank, ABC branches’ financial constraining and controlling capabilities have been strengthened, and financial management improved. A preliminary transparent top-down financial management system has been set up, a new breakthrough in ABC's reform of financial management system. 

It is learned that to guarantee effects of the centralization, "eight problems" have been solved and "eight changes" made. Specifically: First, the financial fund control mode has been changed from "one-off appropriation for revolving use" to "appropriation separately for each application, solving the problem of uncontrollable finance. Second, the mode of reimbursement voucher delivery has been changed from “real object delivery” to “real object + image delivery”, solving the problem of high-cost, high-risk and behind-time financial file delivery.

Third, the approval method of reimbursement application materials has been changed from "manual approval" to "electronic approval", solving problems concerning approval efficiency, costs, risks and standards. Fourth, business division has been reformed with reasonable division between "accounting right" and "management right", solving the problem of single management method of tier-two branches after financial centralization. Fifth, business authorization management has been centralized, solving the problem of decentralized authorization and lagging risks. Sixth, approval authorization has been reformed to divide "review right" and "approval right" reasonably. Seventh, reconciliation management mode has been changed from "manual reconciliation" to "system reconciliation", solving the problem of behind-time reconciliation and inconsistent standards. Eighth, financial supervision mode has been changed from “self-supervision” to “professional supervision”, overcoming the problem of weak supervision. 

From technical perspective, the reform has helped to realize process integration and the seamless connection between image information and e-payment channels based on the new system platform, which is a technical leap forward. From management perspective, the reform has contributed to both centralized accounting and a fundamental improvement in the management system. The reform marks significant innovation and development of ABC’s financial management system, for it has unified modes, contents, processes, systems and platforms (the "five uniforms") at tier-one branch level, and established systems for centralized accounting, review, payment, reconciliation and monitoring (the "five centralizations").