PBOC adjusts deposits calculation rules: banks

China's central bank will adjust rules for calculating bank deposits starting next year in a move to increase funds available for lending at commercial banks, sources said on Sunday.

Several joint-stock commercial banks told Xinhua that they have received a central bank circular regarding inter-bank deposits as regular bank deposits. Meanwhile, the reserve requirement ratio for newly increased deposits under the new rules will be fixed at zero temporarily.

"We have already received the central bank circular on Friday," said an official of a joint stock bank who asked to be anonymous as he is not authorized to speak on the matter.

"Under the new rules, some interbank deposits, including savings for securities and transaction settlement as well as savings held by banks for non-deposit-taking financial institutions, will be calculated as regular bank deposits," the official said.

Analysts said the move was expected to lower banks' loan-to-deposit ratio and increase their available funds to lend amid tight liquidity at the time being.

Guo Tianyong, a professor at the Central University of Finance and Economics, said that the new rules will enlarge deposit as the denominator in calculating the loan-to-deposit ratio. The lower ratio means banks have more capital in their disposal to lend. "It has reflected more flexibilities in monetary policy," Guo said.

A forecast by Haitong Securities said that the adjustment is expected to unleash 5.5 trillion yuan (899 billion U.S. dollars) of credit available for lending. "We expect the average loan-to-deposit ratio of commercial banks will be reduced by 5 percent," the forecast said.

An anonymous official of another joint-stock bank told Xinhua that the adjustment was contributed to what the central bank said a change in deposit structure due to financial renovations. "However, we think the move still eyes on addressing the tight liquidity situation that occurred recently," the official said.

Lian Ping, chief economist with the Bank of Communications, believed the new adjustment will mainly benefit small and medium-sized banks, because large banks are not under heavy pressure from the loan-to-deposit ratio.

In a bid to address the high financing costs for many enterprises, the People Bank of China, the central bank, cut interest rate for the first time in more than two years in November.