93 banks win approval for issuing CDs
Print Edition
CHINA’S central bank yesterday gave the nod to 93 banks, including three foreign lenders, to issue large-denomination certificates of deposit (CDs) to individuals and companies.
The move brings the total number of institutions allowed to issue the certificates to 102.
HSBC is among the foreign lenders on the list.
The expansion will allow more banks to participate in the pricing of China’s financial products and promoting the country’s interest rate reforms.
“Large-sum CDs will be a major tool in commercial banks’ debt initiative to enhance the liquidity in the future,” said Li Qilin, analyst with Fixed Income Department at Minsheng Securities Co.
“The expansion means a further step to interest rate liberalization, and we will see the removing of the cap on deposit rates as the last move.” Li added.
On June 15, nine banks, including the Big Four state-owned lenders, started to issue the country’s first batch of large-scale CDs after the central bank allowed its trading on June 2.
Most of the CDs in the first batch had terms of one year or shorter. The subscription threshold for an individual is 300,000 yuan (US$48,312), while the minimum for an institution is 10 million yuan.
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