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China Daily Website

Loan-to-deposit ratio might see changes: report

Updated: 2012-07-05 14:58
By Gao Changxin in Shanghai (

China's banking regulator is planning on removing the requirement that the lenders' loan-to-deposit ratio must be under 75 percent, though the ratio will still be an important regulatory indicator, Economic Information reported on July 5, citing an anonymous person close to the China Banking Regulatory Commission.

The loan-to-deposit ratio is a measure used for assessing a bank's liquidity by dividing the banks total loans by the total deposits. A lower requirement on the ratio typically boosts lenders' ability to extend loans.

More bank loans might boost the country's economy. China's GDP growth slowed to a three-year low of 8.1 percent in the first quarter. Many economists believe that growth will slow to below 8 percent in the second quarter.

The report came after the People's Bank of China cut the benchmark interest rate and reserve requirement ratio, another requirement that regulates the lenders' lending ability.