Change of deposit calculation rules

PBOC decision expected to lower financing costs, boost lending

The People's Bank of China, the central bank, will change rules on how it calculates the loan-to-deposit ratios of banks from next year, a move that is expected to make available more funds for lending.

The central bank will expand the base for calculating loan-to-deposit ratios by including savings held by banks for non-deposit-taking financial institutions into bank deposits. Under the current rules, Chinese banks are allowed to lend up to 75 percent of their deposits.