Recently, a number of banks said that they have adjusted their "smart notice deposit" products, some have canceled the automatic rollover function, and some have removed related products. Experts said that the adjustment of the "smart notice deposit" product by some banks is in line with the policy guidance of reducing deposit interest rates, which is conducive to continuously reducing the cost of bank liabilities and making the real economy more sustainable for banks.
A number of banks have adjusted related products
On April 30, 2024, Bohai Bank announced that Bohai Bank's automatic rollover of personal call deposit products will be automatically terminated from May 1, 2024, and after termination, the stock of automatic rollover of personal call deposit products will be changed to "call deposit+" products.
On May 1, 2024, Dalian Rural Commercial Bank announced that from May 14, 2024, the automatic rollover function of Dalian Rural Commercial Bank's smart notice deposit product will be cancelled, and customers need to make a notice appointment 1 or 7 days before the withdrawal date (consistent with the current interest calculation rules of Dalian Rural Commercial Bank).
China Guangfa Bank announced on April 15, 2024 that it will take down the automatic rollover service of the notice deposit business of the unit in early May (including related products of the Win in Yitian series), and the existing funds will be adjusted to the non-rollover service mode or returned to the customer's contracted current account according to the specific product and service rules.
On March 1, 2024, the Fujian Provincial Rural Credit Cooperatives Association issued the "Announcement on the Termination of the "Fulibao" Smart Notice Deposit Product, stating that the "Fulibao" smart notice deposit product will be automatically terminated on March 21, 2024. Subsequently, Fuzhou Rural Commercial Bank, Lianjiang Rural Commercial Bank, Sanming Rural Commercial Bank and other rural commercial banks and village banks followed up one after another, and automatically terminated the "Fulibao" intelligent notice deposit product on March 21.
It is worth noting that in May 2023, a number of banks, including large state-owned banks and joint-stock banks, have removed smart notice deposit products or lowered the upper limit of call deposit interest rates.
According to the "Announcement on the Adjustment of Ping An Bank's Smart Deposit - Call Deposit Products" on the official website of Ping An Bank, the bank will suspend the sale of "Smart Notice Deposit" products from May 14, 2023. At that time, the bank's "Smart Notice Deposit" product will no longer support new contracts in the online channel, offline branch counter system, and remote counter bank FB system channel. However, the existing business can still continue to handle product withdrawal, inquiry, termination and other services through various channels of the bank.
This is in line with the notification requirements issued by the relevant authorities. According to the notice received by the bank, for the existing notice deposit customers, the suspension does not require the customer's operation, and the notice deposit will be automatically rolled over intelligently, and the stock will expire naturally.
Dongying Bank also previously issued an announcement stating that in order to implement the measures of the People's Bank of China to deepen the market-oriented reform of interest rates, and in accordance with the relevant guidance requirements of improving the formation and transmission mechanism of market-oriented interest rates, the handling of smart notice deposit business will be suspended from May 15, 2023.
In addition to the "suspension" of smart notice deposit products, many banks also adjusted the interest rates of related products at that time.
According to the announcement of Yibin Commercial Bank, from May 15, 2023, the bank's one-day personal notice deposit interest rate will be adjusted to 1%, the seven-day unit call deposit interest rate will be adjusted to 0.8%, the seven-day personal notice deposit interest rate will be adjusted to 1.55%, the seven-day unit notice deposit interest rate will be adjusted to 1.35%, and the listed interest rate of other term deposits will remain unchanged.
Bank of Zhengzhou announced on May 13, 2023 that it will reduce the implementation interest rate of Zheng Xinbao's deposit products on May 15, 2023. According to the announcement, before the adjustment, the execution interest rates of Zheng Xinbao's 1-day and 7-day periods were 1.3% and 1.85% respectively, and the adjusted execution rates were 1% and 1.55% respectively. The above interest rate adjustment will be officially implemented on May 15. Zheng Xinbao deposit products are personal notice deposits, and the interest is calculated according to the corresponding interest rate and actual deposit period of the products on the withdrawal date, and the Zheng Xinbao products withdrawn after May 15 (inclusive) will be implemented according to the adjusted interest rate.
In addition, a number of banks, such as Bank of Guilin, Bazhou Shunfeng Rural Bank, and Shenzhen Guangminghu Rural Commercial Rural Bank, have also issued announcements on the adjustment of the listed interest rates of agreement deposits or call deposits.
This may be due to the cost of capital and risk management considerations
It is understood that the call deposit is a kind of deposit that does not agree on the deposit period, and the bank needs to be notified in advance when withdrawing, and the withdrawal date and amount can only be withdrawn, and its interest is relatively high.
The difference between smart call deposit and general call deposit is that ordinary call deposit requires the customer to specify "one-day call deposit" or "seven-day call deposit" in advance. If the deposit period is more than 7 days and the "1 day" type is selected, the income will be reduced, and if the "7 days" type is selected and the "7 days" type is withdrawn within 7 days, you will only receive current interest. The smart call deposit is to provide customers with automatic rollover call deposit service when the balance of funds in the personal demand deposit account designated by the customer reaches the minimum deposit amount requirement of the central bank, and give the customer the corresponding one-day or seven-day call deposit interest according to the change cycle of the deposit balance, without the need for the customer to make a preset designation.
A number of industry experts said that the bank's move may be due to the cost of capital and risk management considerations. Although the automatic rollover function provides convenience to depositors, it also increases the bank's capital cost and operational risk. In the current financial market environment, banks need to manage their funds more carefully to deal with various potential risks.
A banking insider said that in recent years, the regulatory authorities have issued corresponding regulatory policies for smart deposit products for many times, and the scope of supervision has gradually expanded to call deposits and agreement deposit products on the basis of ordinary deposits, so as to maintain the normal order of the financial market.
A banking analyst at a brokerage firm said that at the request of the regulatory authorities, some banks' products should expire this year. Objectively, as market interest rates continue to fall, banks' net interest margins continue to come under pressure, and in the context of abundant liquidity, the removal of smart call deposit products with higher interest rates can also reduce banks' funding costs and reduce debt pressure.
Editor-in-charge: Jiang Saisai
Inspector Zhang Xiaonan
Source: National Business Daily, China Fund News