Xinhua News Agency, Beijing, February 15 (Wu Yu, Tang Jianhui) The People's Bank of China recently released a report that by the end of 2020, the balance of interest-bearing products for early withdrawal of fixed deposits has been cleared, a total pressure drop of 15.4 trillion yuan.
Before 2019, in order to absorb deposits, some financial institutions issued so-called "innovative" products such as current deposits that rely on file interest, fixed deposits early withdrawal, and periodic interest payments.
The “China Monetary Policy Implementation Report for the Fourth Quarter of 2020” issued by the People’s Bank of China pointed out that the actual interest rate of these products is significantly higher than the deposit interest rate of the same maturity, and violates the early withdrawal of fixed deposits. Provisions such as one-off repayment of principal and interest.
In order to maintain the order of competition in the deposit market, since 2019, the People's Bank of China has guided the interest rate self-discipline mechanism to strengthen the self-regulatory management of deposits, urged financial institutions to operate in compliance with laws and regulations, and orderly rectified non-standard deposit innovative products.
According to the report, since December 17, 2019, financial institutions have stopped new fixed deposits with early withdrawal of interest-bearing products. At the end of 2020, the balance of such products will drop to zero from 15.4 trillion yuan before the rectification.
In addition, financial institutions have gradually rectified their demand deposit-based interest-bearing products from May 17, 2019, and ceased new operations in December 2019, and the balance will naturally expire.
As of the end of 2020, interest-bearing products for demand deposits have fallen by 5.5 trillion yuan, with a pressure drop of over 80%.