On April 15th, the central bank released a major news. Starting from April 25th, the deposit reserve ratio of in financial institutions will be lowered by 20.25 percentage points (except for 5% of financial institutions). At the same time, for urban commercial banks that do not operate across provinces and rural commercial banks that are higher than 5%, the deposit reserve ratio will be directly lowered by 0.5%. So some people are worried that if banks have sufficient funds to lend, will the deposit interest rate fall again? How big will the decline be?
The so-called deposit reserve ratio is commonly said to prevent the bank from tight liquidity in withdrawals from customers, and deposit the absorbed deposits in a certain proportion of the People's Bank of China to prevent unexpected needs. For example, if you absorb 1 million yuan, you will deposit it at 10% of the People's Bank of China. This 10% is called the deposit reserve ratio. Therefore, for the same bank, the higher the deposit reserve ratio, the less funds it can be lended, and vice versa.
So every time the deposit reserve ratio is lowered, it is good for banks, because the loan funds are more abundant, which can further reduce the pressure on deposit acquisition. Taking this downgrade as an example, there are more than 4,000 banks across the country. The reserve ratio is reduced by 0.25%, which is expected to release 530 billion long-term funds for banks to lend, so the pressure to attract deposits will be alleviated to a certain extent.
Although the reserve requirement cut and interest rate cut are different concepts, they have always been twin brothers. That is, the reserve requirement cut is often accompanied by interest rate cuts. Because the reserve requirement cut reduces the pressure on banks to attract deposits, the demand for deposits will weaken. As an financial product , the price (interest rate) of deposits is also determined by the supply and demand relationship under the conditions of market economy , that is, when supply is in short supply and demand, the price rises (interest rate) falls when supply is oversupply.
has information showing that on the day the central bank released the information on the reduction of the reserve requirement ratio, the market interest rate pricing self-discipline mechanism held a meeting to encourage small and medium-sized banks to lower the floating upper limit of deposit interest rates by 0.1%. So will the deposit interest rate fall this time? If it falls below, how big is its amplitude?
First of all, the market interest rate pricing self-discipline mechanism belongs to a similar industry association organization, so its encouragement is not mandatory, nor is it legally binding. Therefore, whether each small and medium-sized bank truly implements it depends on its own situation. In other words, if the deposits are relatively abundant, it may be meaningful, but some local legal banks that have already had tight deposits are obviously unable to do so.
Secondly, although the release of long-term funds is as high as 530 billion, which seems to be an astronomical figure, it is also a drop in the bucket when implementing them in various banks, so the pressure on bank deposits cannot be fundamentally alleviated. Because our banks are not only numerous, with more than 4,000 banks, but also have a very different scale.
For example, among the four major state-owned banks, the 2021 financial report shows that the total deposit scale of Industrial and Commercial Bank of China is 26.4 trillion, China Construction Bank 22.4 trillion, Agricultural Bank of China 2 is 21.9 trillion, and Bank of China is 18.1 trillion, and the total deposit balance of the four major state-owned banks alone is 88.8 trillion. At a reduction of 0.25%, 222 billion yuan was released, accounting for 42% of the total released funds, nearly half.
plus Bank of Communications and Postal Savings Bank of China , as well as 12 national joint-stock banks deposit balances (all over trillions). It can be said that these 18 banks account for more than half, so for more than 4,000 other small and medium-sized banks, it is simply a drizzle. Therefore, overall, the impact of this reserve requirement cut on deposit interest rates is also minimal.
Third, banks with different scales will also have great differences in interest rate reflections . my country's banks are roughly divided into three levels in terms of asset scale, namely large banks with asset scale of more than 10 trillion yuan, including six state-owned banks and China Merchants Bank (nearly 10 trillion yuan); the second layer is the leading city commercial banks with asset scale of 1-10 trillion yuan and rural commercial banks ; the third layer is other small and micro banks with asset scale of less than 1 trillion yuan. Banks of different sizes do not have the same starting line in terms of asset strength, brand influence, offline physical outlets and radiation areas, so they will have different pricing powers for deposit interest rates.
Therefore, as a large bank, including the six state-owned banks and investment promotion, can be said to have certain pricing capital. Encouraged by the market interest rate pricing self-discipline mechanism, it may be expressed, but it will never be too big, and may only have symbolic significance. , although they release a lot of funds, they never dare to slack off in the heavy asset model. The consequence of excessive action is that the deposit is "big moves" for deposits, but sometimes they must set an example.
For medium-sized banks, the brand influence is average, the customer base is average, the outlets are limited, and the radiation area is not superior, so the pressure to attract deposits is not too fast. Therefore, whether the reserve requirement ratio cuts this time is likely to follow the attitude, follow the "national team", and support it verbally, and it is still guilty to really cut interest rates.
, while other small and micro banks, objectively speaking, do not have the capital to cut interest rates at all. Asset strength, brand influence, outlets, customer products and regions, etc., what is not possible, and you still cut interest rates? Isn't it just a matter of your own?
To sum up, this reserve requirement ratio cut has released a huge amount of funds for the entire banking industry, but it still cannot fundamentally alleviate the deposit pressure for more than 4,000 banks. Even if large banks want to be "leaders", at most, they will be slightly stable and slightly lowered, and the amplitude will never be too large. As for small and medium-sized banks, they have more theoretical support. Although they have enthusiasm, they are still honest. In the face of cruel competition, higher interest rates may continue to be maintained.
