It is learned that Agricultural Bank of China Limited (ABC) will issue its first batch of certificates of deposit (CDs) in RMB with the terms of one month, three months, six months and twelve months on June 15. The interest rate will be up to 1.4 times the benchmark interest rate of the Central Bank.
CDs are issued by deposit financial institutions of the banking sector to certify the large-amount general deposit of investors other than financial institutions. CDs are registered certificates covered by deposit insurance. The products feature high threshold, high safety of capital and interest, standard terms and market-based interest rate. On June 2, PBOC released a public announcement that CDs will be officially launched in China as an important measure to push forward the reform of interest rate liberalization.
In active response to the requirement of PBOC for deepening reform, ABC kicked off R&D of its CD in the first half of 2014. It completed renovation and upgrading of its core banking system, management system and internal control process, laying solid foundations for CD issuance.
ABC attached great importance to innovation and customer needs in designing the first batch of CDs. It used multiple liquidity support methods to satisfy customers’ differentiated demands for returns and liquidity, and diversified the debt product line. A principal of ABC explained that, some of the CDs allow more than one withdrawals before maturity at interest rates specified accordingly. This on one hand meets customers’ demand for high return and on the other provides strong liquidity support.
In the next step, ABC will adhere to the overall plan for innovative development and make full use of debt products including deposit, CD, inter-bank CD and wealth management products to serve customers with diverse investment options.
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