After reviewing the deposit reserve deviation, the central bank, also known as the People’s Bank of China (PBOC), further “averages” the review method for reserve requirement ratio (RRR) to hedge the market fluctuation caused by timing factors.
China's proposed bank deposit insurance scheme will be an important development for further financial reforms, reducing financial risks and rebalancing the economy, said Fitch in its latest report.
China is to adopt a deposit insurance scheme to better protect savers and free up interest rates.
China's asymmetric interest rate cuts are set to add difficulties to its commercial banks, which are already facing less profit, increased bad loans and pressures on asset quality, analysts warned.
China is very likely to ease its grip on banks' deposit rate in the coming one or two years, central bank governor Zhou Xiaochuan said on Tuesday.
Preparations for a deposit insurance system have been finished, said China's central bank over the weekend, in the latest signal that the world's second-largest economy is ready to further overhaul its financial system.
China's central bank on Sunday published a guideline on deposit certificates in the interbank market, another step towards fully floating interest rates.
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