BEIJING: China’s major state-owned commercial banks further lowered nominal deposit interest rates on Friday to enhance the sustainability of serving the real economy and ensure stability in promoting high-quality development, reported Xinhua.
The country’s “big four” commercial banks – Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank – have released their plans for the interest rate cut, lowering the rate for one-year fixed-term deposits by 0.1 percentage points, the two-year rates by 0.2 percentage points and the three-year and five-year rates both by 0.25 percentage points.
This is the third deposit interest cut for state-owned big banks in 2023, with previous cuts implemented in early June and around early September. It also marks the fourth round of active adjustments of deposit interest rates by commercial banks based on their own operational needs and market situation since September 2022.
The rate cut is a market-oriented adjustment of these banks in the context of a shrinking net interest margin (NIM). The NIM of commercial banks in the country stood at 1.73 per cent in the first three quarters of this year, earlier data showed.
Since the beginning of this year, China’s loan interest rate has continued to decline, and commercial banks have strengthened measures to offer more profits to the real economy, said Dong Ximiao, chief researcher at Merchants Union Consumer Finance Company Limited, noting that by decreasing deposit interest rates, commercial banks can reduce debt costs and increase the ability to serve the real economy and stabilise high-quality development.
The move could also encourage enterprises and people to increase investment and consumption to a certain extent, which will help boost consumption and expand domestic demand, Dong added. – BERNAMA-XINHUA
