From lowering interest rates to controlling costs, some small and medium-sized banks are reducing deposit interest rates.

Since March of this year, several small and medium-sized banks, including Heilongjiang Youyi Rural Commercial Bank, Nanjing Pukou Jingfa Village Bank, and Shanghai Huari Bank, have lowered their deposit interest rates. After this adjustment, some small and medium-sized banks’ deposit interest rates have entered the “1” range, with all term deposit rates below 2%. Industry insiders indicate that the intensive reduction of deposit interest rates by small and medium-sized banks may seem like a change in interest rate figures, but it reflects a profound transformation in the development philosophy of China’s banking industry. Transitioning from “competing on interest rates and pursuing scale” to “controlling costs and improving efficiency,” small and medium-sized banks are shifting towards reducing costs and increasing efficiency, as well as building a distinctive service system. Experts suggest that small and medium-sized banks should leverage their local roots to gain a deep understanding of regional industrial structures, enterprise operating conditions, and residents’ financial needs, in order to provide more precise financial services to their clients. (China Securities Journal)