New Delhi, Oct. 5 -- China's banking map is rapidly being redrawn.

A record 670 lenders disappeared in 2025 as Beijing accelerated mergers and closures of smaller banks, signalling a push to consolidate a fragmented part of the financial system while economic growth slows and financial risks remain concentrated among rural and regional institutions.

The scale of the change is striking. The 670 closures represented about one-quarter of China's banks, according to Fitch Ratings analysis. The aim is to bring smaller institutions under tighter oversight and create banks with stronger capital bases and greater capacity to absorb losses.

The pressure is greatest among China's small and rural commercial banks, which serve local economies but ...