New Loan-Deposit Formula 'Could Free up 2 Bln Yuan for Banks to Lend'

(Beijing) – The new method for calculating the loan-to-deposit ratio can unfreeze up to 2 trillion yuan for banks to extend loans, the brokerage firm Shenyin & Wanguo Securities said in its research report.

Starting in July, banks no longer need to count six types of funds as loans in the ratio, which is legally required to not exceed 75 percent. The regulator uses the ratio to pace money supply and ensure banks have enough cash in reserve.