China to introduce bank deposit insurance from May: sources

[BEIJING] China is set to start a maiden insurance system for bank deposits from May, two sources with knowledge of the matter said on Tuesday, a development considered by many analysts to be a crucial financial reform.

The insurance system and a fund that banks will have to pay into to finance the protection of depositors will be managed by the central bank, said the sources, who declined to be named as they are not authorised to speak to the media.

The central bank was not immediately available for comment.

Insuring deposits is seen as a vital step on the way to full liberalisation of the country's interest rates market and greater competition between banks.

REUTERS