Zhou Xiaochuan, governor of the People's Bank of China, said on March 12 that the cap for Renminbi deposit rates would probably be removed if a proper opportunity comes up this year.
Most of China's small-sized banks were not tested in a real market economy and their business pattern of differentiation and specialties has not completely taken in place. Once the cap for deposit rates is gone, the small-sized banks need a transitional period to adapt to the change.
Zhou Xinsheng, (CPPCC member, Chairman of Supervisory Board of Changan Bank)
Mar 13, 2015, via nandu.com
The floor on loan interest rates has been dropped in our country for many years, and the interest rates will be completely determined by the market when the cap for deposit rates is entirely removed. However, moving to a completely free market for interest rates is a big challenge for the bank. As we all know, when interest rates were first determined by the market in Taiwan, it led to a a wave of bankfailures.
Southern Metropolitan Daily Mar 13,2015, via nandu.com
After the the cap for deposit rates is removed, the bank can't keep raising the rates without limits. And there has to be a balance between profit and loss, but different banks would take different strategies, which will lead more diversity in terms of deposit rates in the market.
Zeng Gang (director of Bank research center with the Chinese Academy of Social Sciences)
Mar 13, 2015, via nandu.com
The market-oriented interest rates isn't just as simple as dropping deposit rate cap. It is more important to create a policy environment suitable for the market-oriented interest rates.
Wu Xiaoling (deputy director of the Financial and Economic Affairs Committee of the NPC)
Mar 13, 2015, via Economic Information Daily
Letting the market determine interest rates is a positive policy as banks could decide on their own deposit rates according to their own business situation. In the future bank savings depositors will have many choices according to their own requirements, which will lead to more competition among banks.
@ billyuceo520 Mar 13,2015, via Sina Weibo
Operation of banks would be harder as long as the deposit interest rate cap is removed, but it absolutely will benefit the public, and a reduction in the number of loansharks.
@Yeshichuanren Mar 12，2015，via Sina Weibo
Related Stories
Copyright 1995 - 2015 . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263 Registration Number: 130349 
