In 2014, the first private banks were introduced in China, and after a quiet period in 2015 there was a huge development and currently there are 17 private banks. Will the establishment of a large number of private banks enhance the efficiency of financing for physical enterprises, and will this really solve the problem of financing for small and medium enterprises? Anbound research team believes that the situation is not exactly optimistic within short period of time. First of all, private banks and other banks are also facing market expansion and competition. Secondly, there are challenges in risk control. Thirdly, China's private banks are facing systemic problems in the domestic financing environment. Increasing the number of private banks is a commendable trend, though the development will only be gradually on track after trial and error for a few years.