China is allowing some banks, including China Merchants Bank Co. (3968.HK), to set deposit rates freely under a pilot program, China Daily reported Tuesday, citing an unnamed source.
Under the trial, launched two months ago, banks can set their own rates for deposits with a maturity of no more than five years, the report said.
The pilot program is mainly aimed at insurance companies and big companies that tend to have fixed large deposits in banks, the report said.
"Among deposit rates, those for corporate agreement deposits (contracted savings between banks and their clients) with maturity of more than five years are already liberalized. The system is aiming to open up pricing limits for the short- and medium-term deposits," the report cited the source as saying.
China Merchants Bank is the only major commercial bank in the trial along with a few small-sized city commercial banks, the report added, without naming other pilot banks.
