The formal approval of the three private banks' establishment application recently by CBRC(China Banking Regulatory Commission) signals that China’s private banks has entered a new era. However, there is no consensus among various parties on the future prospects of private banks. ANBOUND think tank scholars have previously offered warnings on the risks that private banks will probably face. They will likely become historical receivers of bad loans especially in a downward economy when the probability of an increasing bad loan rate is on the rise. Therefore, how to conduct business innovation under current financial structure according to their own advantages will be the key to determine how far private banks can go.