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China banking group encourages lenders to cut deposit rates

Suggestion comes after Beijing began requiring banks to go easier on businesses

Chinese banks are reporting that the margin between their interest earnings and interest expenses is shrinking.   © Reuters

A banking industry body has encouraged smaller lenders to reduce the interest they offer on deposits, a move that could reduce the pressure on their finances, sources familiar with the matter told Caixin.

The self-discipline mechanism for market interest rate pricing, which is overseen by the central bank, recently suggested small and midsize banks lower their upper limit for deposit rates by 10 basis points, the sources said.

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