Premier Li Keqiang signed a decree to introduce bank deposit insurance to protect the interests of depositors and financial stability.
The Deposit Insurance Act, passed by the 67th executive meeting of the State Council, announced the launch of the insurance program that covers deposits up to 500,000 yuan ($81,433).
The People’s Bank of China, approved by the State Council, can adjust the maximum amount of compensation according to the situation and potential risks, according to the regulations.
The State Council will also approve standard rates for the insurance program, along with additional risk rates, the regulations said.
All financial institutions under the system will be required to pay insurance premiums into a fund that will be managed by an agency appointed by the State Council.
Foreign banks operating in China, and overseas branches of Chinese banks, are not covered by the program, the draft document said.
The regulations will take effect on May 1.