China offered first details of its interest rates and bank liberalization program.
People’s Bank of China and financial regulators today said China will permit the establishment of privately owned banks and liberalize interest rates as early as next year.
The pace of reform are likely to happen faster than expected after President Xi Jinping offered a framework of the market-driven reforms in November.
China determines what rates are paid on savings account. The current upper limit of the one-year household savings deposit is set at 3% for one-year term and is set at as low as 0.35% for short term or current account.
The officials at the press conference also said that the government has approved five new private banks.
China’s government tightly controls its vast network of local and regional banks and total assets at these banks have surged to 151 trillion yuan or $25 trillion.