As authorized by the State Council and the People’s Bank of China, deregulation of financial institutions’ loans interest rates became effective as of 20th July 2013.
1. The lower limit of 30% discount on loans interest rates was revoked for all financial institutions, and loans interest rates shall be determined by financial institutions as per commercial principles at their own discretion.
2. Bill discount interest rates are deregulated, altering the method of adding percentage points to rediscount interest rate as the bank rate. Bank rates shall be decided upon by financial institutions.
3. No more upper limit shall be set upon loans interest rates of rural banks.
4. Floating range of home loans interest rates remain unchanged in a bid to continue strictly abiding by differentiated housing loans policies to boost healthy development of property market.
The overall deregulation of loans interest rates will give more flexibility to financial institutions in price negotiation with clients, which is conducive to motivating financial institutions to resort to pricing differentiation strategy for financial cost reduction for enterprises, conducive to continuous improvement of financial institutions’ pricing capability, operation mode transformation and services standard to provide stronger financial support for enterprises and residents, conducive to optimizing financial resources allocation, bringing into better play financial support for real economy and stronger support for economic restructuring and transformational upgrade.