China to 'definitely' implement deposit insurance this year: insiders

(ECNS) -- China will "definitely" roll out its long-awaited deposit insurance system this year after "a consensus on the final plan was reached amongst regulators," thepaper.cn, a newly-launched state-backed news website said on Wednesday, citing anonymous insiders.

Besides banks, the final plan also requires all deposit-taking organisations, including rural credit cooperatives, to pay insurance, the report stated.

Under the current plan, a deposit insurance fund will be established at first followed by a special institution during the next stage, an insider added.

The China Banking Regulatory Commission still holds the regulating authority, while the central bank will be in charge of bank re-organization, the insider said.

The deposit insurance program serves as a measure to ensure a certain level of deposits is guaranteed by the state even if a bank goes bankrupt. The maximum protection limit of the system will be capped at 500,000 yuan ($81,385) per account.

About 98 to 99 percent of depositors will be covered, another insider said.

The deposit insurance system is considered a precondition for freeing deposit rates, the last and most important step of interest rate liberalization, Xinhua has said.