The People's Bank of China (“PBC”) Shanghai Head Office; all regional branches and operations offices of the PBC; all central sub-branches of the PBC in capital cities of provinces (autonomous regions) and the central sub-branch of the PBC in Shenzhen; China Development Bank; all policy banks, state-owned commercial banks, and joint-stock commercial banks; Postal Savings Bank of China; and all financial asset management companies:
The PBC has decided to lower the RMB benchmark lending and deposit rates for financial institutions from October 24, 2015, and further promote the interest rate liberalization reform. You are hereby notified of the relevant matters as follows:
I. Adjusting the benchmark lending and deposit rates for financial institutions
(1) Lowering the RMB benchmark lending rates for financial institutions: The interest rate for loans with a term of one year shall be lowered by 0.25 percentage point from the current 4.6% to 4.35%; while the interest rates for loans in other brackets shall be adjusted accordingly (see Annex 1 for the specific rates).
(2) Lowering the RMB benchmark deposit rates for financial institutions: The interest rate for deposits with a term of one year shall be lowered by 0.25 percentage point from the current 1.75% to 1.5%; while the interest rates for deposits in other brackets shall be adjusted accordingly. Interest rates for demand deposits shall remain unchanged (see Annex 2 for the specific rates).
(3) Lowering the interest rates for personal housing provident fund deposits: The interest rate for personal housing provident fund deposits collected in the current year shall remain at 0.35%; while the interest rate for personal housing provident fund deposits carried forward from the previous year shall be lowered by 0.25 percentage point from the current 1.35% to 1.1% . The lending rates for the personal housing provident fund shall remain unchanged.
II. Further promoting the interest rate liberalization reform
The upper limits on the interest rates for demand deposits, term deposits with a term of not more than one year, agreement deposits, and call deposits for financial institutions such as commercial banks, rural cooperative financial institutions, village banks, finance companies, financial leasing companies, and auto finance companies shall be removed. The aforesaid financial institutions may autonomously determine the benchmark interest rates for the aforesaid deposits by reference to the benchmark interest rates for the corresponding deposits.
III. Financial institutions shall adhere to the concept of serving the real economy, conscientiously implement the interest rate adjustments and reform policies, and according to the adjustments to the benchmark interest rates and in consideration of credit, maturity, and other factors, adjust their lending rates for clients, so as to practically reduce the social financing cost. They shall further enhance the deposit rate pricing mechanism, determine in a scientific and reasonable manner the deposit rates in consideration of cost, risk, and other factors, continue to improve their refined and differentiated pricing abilities for deposits, and better adapt to the new circumstances and new environment of interest rate liberalization. They shall properly handle contractual relationships, and effectively provide publicity and interpretation of relevant information to clients. They shall make coordinated arrangements on the asset and liability operation strategies, enhance financial hard constraints and interest rate risk management, and conscientiously maintain a fair and orderly environment of market competition.
Financial institutions shall also develop and improve their measures for the management of deposit pricing in light of the removal of upper limits on deposit rates, and submit them to the PBC before the end of 2015. National financial institutions shall submit them to the PBC, while local incorporated financial institutions and foreign-funded banks, among others, shall submit them to the regional branches, operations offices, or central sub-branches in capital cities of provinces (autonomous regions) of the PBC.
IV. The PBC Shanghai Head Office, all regional branches (operations offices), and central sub-branches in capital cities of provinces (autonomous regions) and Shenzhen of the PBC shall immediately forward this Notice to the urban (rural) commercial banks, rural cooperative banks, rural credit cooperatives, foreign-funded banks providing RMB deposit and lending services, finance companies, financial leasing companies, auto finance companies, and other financial institutions as well as housing provident fund management centers within their respective jurisdictions, and supervise them in implementing this Notice as scheduled.
V. China Development Bank, all policy banks, state-owned commercial banks, and joint-stock commercial banks, and Postal Savings Bank of China shall immediately forward this Notice to their branch offices (banking institutions shall also immediately forward this Notice to village banks formed by them as promoters) to ensure that the interest rate adjustments are completed as scheduled.
VI. Responses from various parties as well as new situations and new problems arising after the interest rate adjustments shall be handled in a timely manner, and reported to the PBC.
(Fax: 010-66012765)
Annexes: (for annexes please refer to the Chinese version)
1. Table of Adjustments to RMB Benchmark Lending Rates for Financial Institutions
2. Table of Adjustments to RMB Benchmark Deposit Rates for Financial Institutions
The People's Bank of China
October 23, 2015
