CD liberalization 'a step forward'

Higher interest rates could help banks attract large depositors

The People's Bank of China will allow commercial banks to offer large-denomination certificates of deposit to individuals and companies, a further step to free up interest rates, The Wall Street Journal reported.

According to sources in the banking industry, the CDs will be available on a trial basis as early as this week to allow a gradual introduction to the market, according to The Wall Street Journal. During a test run involving more than 10 banks, the interest rate will be set at 3.4 percent for one-year CDs with a minimum investment of 100,000 yuan ($16,035), the Journal said.