BEIJING — China allowed 39 financial institutions, including three foreign banks, to issue large-denomination certificates of deposit (CDs) to individuals and companies from Oct 20.
This brings the total number of institutions allowed to issue the certificates to 353, according to a statement from the China Foreign Exchange Trade System (CFETS).
CDs are tradable deposit agreements that allow the market to play a central role in deciding the interest rates of financial products.
China started to allow banks to issue large-scale CDs in June 2015, in a step toward interest rate liberalization, which was basically completed in October 2015 with the removal of the deposit rate upper limit.
The latest move aims to support CD market growth and allow more financial institutions to price their products in a market-based manner, the CFETS said.
The three foreign-funded banks newly approved for the issuance are OCBC Wing Hang Bank (China) Ltd.; Bank of Tokyo-Mitsubishi UFJ (China) Ltd.; and Standard Chartered Bank (China) Ltd.
The participation threshold for purchasing a CD is set at 300,000 yuan (about $44,530) for individual investors and 10 million yuan for institutions, according to China’s central bank.