China to implement deposit insurance in H1 2015

Zhou Xiaochuan, governor of the People's Bank of China, attends a press conference for the third session of the 12th National People's Congress (NPC) on financial reform in Beijing, capital of China, March 12, 2015. (Xinhua/Yin Gang)

China is expected to implement the deposit insurance scheme in the first half of this year, said central bank governor Zhou Xiaochuan.[Special coverage]

Public response to draft deposit insurance regulations was generally positive, Zhou said at a press conference on the sidelines of the country's annual parliamentary session.

In the end of November, the Legislative Affairs Office of the State Council published the draft regulations for public opinions.

According to the draft, banks will pay insurance premiums and an agency will manage the money. The fund will pay maximum compensation of 500,000 yuan (81,500 U.S. dollars) per depositor if a bank suffers insolvency.

Deposit insurance is an important step in China's wide-ranging financial reforms, Zhou said.

A norm in more than 110 economies to protect depositors, it is considered a precondition for China to free up deposit rates -- the last step in interest rate liberalization in the country.