The deposit insurance system was formally implemented on May 15, 2005.

The State Council officially promulgated the Deposit Insurance Ordinance (hereinafter referred to as the Ordinance) today. According to the regulations, commercial banks, rural cooperative banks, rural credit cooperatives and other deposit banking financial institutions established in China shall participate in deposit insurance in accordance with the provisions of these regulations. Deposit insurance is subject to limit payment, and the maximum payment limit is RMB 500,000. This regulation came into effect on May 1.

The influence of deposit insurance system on commercial banks

Deposit insurance refers to the deposit insurance fund formed by deposit banks paying premiums. When there are problems in the operation of individual deposit banks, the deposit insurance fund shall be used in accordance with the regulations to pay depositors in time. At present, many countries and regions in the world have established deposit insurance systems.

According to the deposit situation of the central bank at the end of 20 13, it can cover all deposits of 99.63% depositors. This means that the deposits of most depositors can be fully guaranteed and will not suffer losses. The limit of 500 thousand yuan is not fixed. The central bank said that it will adjust according to factors such as economic development, changes in deposit structure and financial risks.

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