Sources: The Central Bank Issued Differentiated Deposit Reserve Ratio Policy.

2011/1/7 9:31:00 59

Central Bank Differential Deposit Reserve Ratio

According to the Wall Street journal, insiders from a large state-owned bank revealed that the Central Bank of China has issued a guideline for the bank to calculate and adjust the deposit reserve ratio of commercial banks.

The anonymous person familiar with the matter said it was unclear whether the central bank had sent notice to other banks, but the notice received by its bank appeared to apply to all banks in the industry.

The above guidelines include a formula for calculating the bank reserve ratio and detailed rules for the adjustment of the deposit reserve ratio in part based on changes in bank loan growth and capital adequacy ratio.

Zhou Xiaochuan, governor of the people's Bank of China, pointed out in an interview article published in the first issue of Chinese Finance magazine in 2011 that dynamic adjustment measures of differential reserves should be implemented in the future.

We should combine monetary credit and liquidity management with the construction of macro Prudential policy framework, enrich and supplement policy instruments, and guide monetary and credit growth moderately.

The so-called differential reserve ratio system refers to the financial institutions deposit reserve ratio and its capital adequacy ratio, asset quality indicators and other indicators.

The implementation of differential deposit reserve ratio system can restrict loan expansion of financial institutions with insufficient capital adequacy and low asset quality.

When the people's Bank of China began to exercise its central bank functions in 1984, the deposit reserve system was established.

In recent years, the central bank has adjusted the reserve requirement ratio for many times to the financial institutions whose capital ratios are below a certain level.