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China to launch deposit insurance scheme next year

By Hu Yuanyuan (chinadaily.com.cn)
Updated: 2008-12-18 15:21

China plans to launch a deposit insurance scheme next year, a move to prevent growing potential risks triggered by the global financial tsunami, a central bank official said.

"Relevant departments have submitted a draft plan of the deposit insurance scheme to the State Council. The plan is expected to be passed by next year at the latest," Zhang Jianhua, director of the central bank's research bureau, was quoted by today's Southern Metropolitan News as saying.

According to a survey by the People's Bank of China, the central bank, over 98 percent of deposit accounts are lower than 200,000 yuan ($29,197), indicating the ceiling for the deposit insurance could be no more than 200,000 yuan.

Analysts at Shenyin & Wanguo said people with deposits ranging from 150,000 to 250,000 yuan will be the biggest beneficiaries of the new scheme.

The United States was the first country to establish an official deposit insurance system during the Great Depression of 1934. Currently, nearly 100 countries have such an arrangement in place.