Banks including China CITIC Bank, China Minsheng Banking Co Ltd and China Everbright Bank have raised their one-year deposit rate to 3.575 percent. The rate is 1.1 times the benchmark interest rate and reaches the upper limit deposit rate floating range regulated by the People's Bank of China.

The PBOC announced a 0.25 percent cut of benchmark interest rates on June 7, and allowed banks to increase the deposit rate to 1.1 times the benchmark rate.

Some commercial banks have since then floated interest rates to draw in more deposits. China CITIC Bank and Minsheng made the announcement to up deposit rates on June 14 and Everbright Bank followed suit on June 15.

China CITIC Bank said the adjustment is to "ensure that clients can get the highest amount of interest from their deposits."

By June 16, eight of the 16 listed banks have seen their deposit rates touch the upper limit, the Beijing Times reported.

Smaller banks have chosen to increase the deposit rate for fear that deposits would flow out, but whether the practice is rational depends on their bargaining power, financial expert Zhao Qingming told Beijing Times. He explained that if small banks have comparatively strong bargaining power in making loans, their profits may be unharmed by the deposit rate growth.