Deposit insurance not to impact bank profit

BEIJING - The initial premiums rate of newly launched deposit insurance will not impact the profit of entire banking sector, according to China's central bank on Friday.

Pan Gongsheng, deputy governor of the People's Bank of China (PBOC), said that the premiums of deposit insurance will be much lower than that of other countries.

He said the premiums rate will take into consideration global experience and risk control, which is likely to be adjusted in accordance with market changes and deposit insurance volume.

Higher rates will be applied to the institutions with higher risks, and those with lower risks will pay less premiums, Pan added.

The Chinese government announced on Tuesday that it will implement the long-awaited bank deposit insurance scheme in May, and financial institutions will be required to pay insurance premiums into a fund that will be managed by an agency appointed by the State Council.