Recently, several Chinese small and mid-sized banks have adjusted deposit rates in differing directions. Shanghai Songjiang Fuming Rural Bank will cut its two-year and three-year time deposit rates by 15 and 35 basis points respectively starting September 21, resulting in an inverted term structure where extending the deposit term from one year to three years actually yields a lower rate. Meanwhile, WeBank raised its three-year time deposit rate from 1.60% to 1.75%, and Blue Ocean Bank raised its one-year time deposit rate from 1.65% to 1.70%.

Analysts point out that some banks are lowering medium- to long-term deposit rates mainly due to pressure from funding costs, aiming to ease pressure from persistently low net interest margins. At the same time, the localized rate hikes for specific terms reflect continued demand among some institutions to shore up their deposit bases. Huatai Securities, Guosen Securities, and CICC estimate that roughly 50 trillion to 75 trillion yuan in time deposits will mature in 2026, giving banks a window to adjust rollover pricing. The People's Bank of China (PBOC) had previously sought public comment on June 5 on the "Administrative Provisions on RMB Deposit and Loan Interest Rates," aiming to curb the practice of attracting deposits through high interest rates.