Deposit insurance

China is undertaking one of the boldest financial reforms so far this year following the central bank's publishing of draft rules on a deposit insurance system.

The People's Bank of China, the central bank, published the rules on Nov 30 and has since started soliciting public opinion after 21 years of deliberation.

Under the draft rules, accounts with deposits of up to 500,000 yuan ($81,500) will be insured per depositor if a bank suffers insolvency or bankruptcy.

Financial institutions will be required to pay insurance premiums into a fund and an agency will be set up to manage the money.

The move highlights the leadership's resolve in further rebalancing the financial system with market-oriented measures.

Deposit insurance was mulled as early as December 1993, when the State Council said a deposit insurance fund would be founded in order to protect public interests in a decision to reform the financial system.

A Chinese clerk counts renminbi banknotes at a branch of China Construction Bank in Haian county, Nantong city, East China's Jiangsu province, on Dec 2, 2014. [Photo/IC]