{"id":129517,"date":"2021-06-21T09:36:46","date_gmt":"2021-06-21T09:36:46","guid":{"rendered":"https:\/\/precoinnews.com\/?p=129517"},"modified":"2021-06-21T09:36:46","modified_gmt":"2021-06-21T09:36:46","slug":"china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/","title":{"rendered":"China deposit rate reform to ease pressure on banks' costs – industry body"},"content":{"rendered":"

BEIJING (Reuters) – China\u2019s reforms to the way banks calculate deposit rates will help ease pressure on banks\u2019 funding costs, although the impact on lenders and depositors will be limited, an industry body overseeing rates said on Monday.<\/p>

People walk past the headquarters of the People’s Bank of China (PBOC), the central bank, in Beijing, China September 28, 2018. REUTERS\/Jason Lee\/Files<\/figcaption>

The body said the previous practice of multiplying the benchmark rate had pushed up lenders\u2019 overall funding costs as some used innovative products to lure deposits, prompting competitors raise long-term deposit rates.<\/p>\n

From Monday, June 21, China will allow banks to set ceilings on deposit rates by adding basis points to the benchmark rate, a shift from the previous practice of multiplying the benchmark rate, the Self-Disciplinary Mechanism for the Pricing of Market-Oriented Interest Rates said.<\/p>\n

Ceilings on banks\u2019 deposit rates with maturities of more than one year have declined following the reforms, while ceilings on banks\u2019 time deposit rates with maturities of six months or less have risen, according to the body, which is supervised by the People\u2019s Bank of China (PBOC).<\/p>\n

\u201cThe new scheme eliminates the leverage effect, and the gap between long-term and short-term deposit rates will be narrowed, which is conducive to guiding bank deposits to return to a reasonable term structure,\u201d the industry body said.<\/p>\n

Sources have told Reuters that China plans to reform the way banks calculate deposit rates, setting new ceilings of up to 75 basis points above the benchmark rate for some lenders.<\/p>\n

All banks will be allowed to add up to 20 basis points (bps) to the benchmark rate on demand deposits and small Chinese banks and foreign banks will be permitted to add up to 75 bps to the benchmark rate on time deposit rates, the sources said.<\/p>\n

The deposit rate reform will help banks keep a reasonable interest margin and profitability, which will be \u201ccrucial for ensuring banks\u2019 continuous credit supply to the real economy\u201d, analysts at China Securities said in a note.<\/p>\n

On Monday, the PBOC kept its benchmark lending rate, the loan prime rate (LPR), unchanged for the 14th straight month at its June fixing. The one-year loan prime rate (LPR) was kept at 3.85%.<\/p>\n

A reasonable margin between deposit rates of small- and medium-sized banks and those of state-owned banks will be conducive to maintaining the current relatively balanced market competition environment, the industry body said.<\/p>\n

In October 2015, the PBOC scrapped the ceiling on bank deposit rates, which are still constrained by its window guidance and pricing mechanism. The PBOC has kept the one-year benchmark deposit rate unchanged at 1.5% since then.<\/p>\n

Some Shenzhen banks have lowered their deposit rates, said the Shenzhen Special Zone Daily on Monday, following interest rate reform meetings held in Beijing. The paper cited unnamed sources.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

BEIJING (Reuters) – China\u2019s reforms to the<\/p>\n","protected":false},"author":3,"featured_media":129516,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23054],"tags":[],"yoast_head":"\nChina deposit rate reform to ease pressure on banks' costs - industry body - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China deposit rate reform to ease pressure on banks' costs - industry body - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"BEIJING (Reuters) – China\u2019s reforms to the\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2021-06-21T09:36:46+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/06\/China-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/\",\"url\":\"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/\",\"name\":\"China deposit rate reform to ease pressure on banks' costs - industry body - Pre Coin News\",\"isPartOf\":{\"@id\":\"https:\/\/precoinnews.com\/#website\"},\"datePublished\":\"2021-06-21T09:36:46+00:00\",\"dateModified\":\"2021-06-21T09:36:46+00:00\",\"author\":{\"@id\":\"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a\"},\"breadcrumb\":{\"@id\":\"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/precoinnews.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Markets\",\"item\":\"https:\/\/precoinnews.com\/category\/markets\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"China deposit rate reform to ease pressure on banks' costs – industry body\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/precoinnews.com\/#website\",\"url\":\"https:\/\/precoinnews.com\/\",\"name\":\"Pre Coin News\",\"description\":\"precoinnews.com\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/precoinnews.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a\",\"name\":\"mediabest\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/precoinnews.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g\",\"caption\":\"mediabest\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"China deposit rate reform to ease pressure on banks' costs - industry body - Pre Coin News","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/","og_locale":"en_US","og_type":"article","og_title":"China deposit rate reform to ease pressure on banks' costs - industry body - Pre Coin News","og_description":"BEIJING (Reuters) – China\u2019s reforms to the","og_url":"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/","og_site_name":"Pre Coin News","article_published_time":"2021-06-21T09:36:46+00:00","author":"mediabest","twitter_card":"summary_large_image","twitter_image":"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/06\/China-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body.jpg","twitter_misc":{"Written by":"mediabest","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/","url":"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/","name":"China deposit rate reform to ease pressure on banks' costs - industry body - Pre Coin News","isPartOf":{"@id":"https:\/\/precoinnews.com\/#website"},"datePublished":"2021-06-21T09:36:46+00:00","dateModified":"2021-06-21T09:36:46+00:00","author":{"@id":"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a"},"breadcrumb":{"@id":"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/precoinnews.com\/markets\/china-deposit-rate-reform-to-ease-pressure-on-banks-costs-industry-body\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/precoinnews.com\/"},{"@type":"ListItem","position":2,"name":"Markets","item":"https:\/\/precoinnews.com\/category\/markets\/"},{"@type":"ListItem","position":3,"name":"China deposit rate reform to ease pressure on banks' costs – industry body"}]},{"@type":"WebSite","@id":"https:\/\/precoinnews.com\/#website","url":"https:\/\/precoinnews.com\/","name":"Pre Coin News","description":"precoinnews.com","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/precoinnews.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a","name":"mediabest","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/precoinnews.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g","caption":"mediabest"}}]}},"_links":{"self":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/posts\/129517"}],"collection":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/comments?post=129517"}],"version-history":[{"count":0,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/posts\/129517\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/media\/129516"}],"wp:attachment":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/media?parent=129517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/categories?post=129517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/tags?post=129517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}