Founded as urban credit cooperatives in 1980s, it aimed to provide funds for local small and medium-sized enterprises and stimulate local economy.
Most city commercial banks have strong ties to their local government and are majority or wholly state owned.
Since 2005 some city commercial banks diversify their shareholders, inviting Chinese and international private companies to take minority shares, merging and cross-shareholding.
Since 2008, an observable trend has emerged for city commercial banks to extend business beyond their home region.
They are also often the main shareholder behind village and township banks (VTB).