The People’s Bank of China (PBoC), China’s central bank, set up a company to manage a RMB 100 billion ($14.5 billion) fund to protect depositors’ savings at financial institutions the day regulators took a rare move to seize Inner Mongolia-based Baoshang Bank, said Caixin.
Business registration information showed that the Deposit Insurance Fund Management Co. Ltd. was established Friday, with RMB 10 billion in registered capital.
Huang Xiaolong, deputy head of the PBoC’s financial stability bureau, will act as the legal representative and executive director of the company managing the fund, which would be used to repay a member financial institution’s debt if it became insolvent.
Depositors could receive up to RMB 500,000 each in compensation if a bank went under, according to the rules of the deposit insurance plan approved by the State Council in 2015.
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