PBOC warns banks their interest rates are too high

Rate of return offered on structural deposits should not be higher than general deposits

by Huang Wanyi, Xu Jiangshan
PBoC warns banks on interest rates
China's central bank has warned banks that interest rates paid on structural deposits should not exceed the interest paid on general deposits. File photo: PBoC

(ATF) – The People's Bank of China has given a warning to banks, calling on them to strengthen oversight of interest rates on deposits.

The central bank announced on March 10 that the guaranteed rate of return offered by some banks on structural deposits was significantly higher than the general deposit interest rate.

Such moves, it said, were not conducive to maintaining the order of competition in the deposit market and should be regulated.

The People's Bank of China recently issued a note to various branches and major financial institutions about strengthening the management of deposit interest rates.

It wants "self-discipline" to guide the market interest-rate pricing – to strengthen the management of deposit interest rates.

The PBoC called for banks to bring the guaranteed rate of return on structural deposits into the scope of "self-disciplined management".

ALSO READ: Market tipped to grow despite default risk 

ALSO READ: How debt market became weapon in Covid-19 fight