China's Multiple Banks Remove Mid-to-Long-Term Time Deposit Products Amid Narrowing Interest Margins
Several private banks in China, including Zhongguancun Bank, Shanghai Huarui Bank, etc., have removed or tightened the issuance of mid-to-long-term time deposit products such as 3-year and 5-year terms. This is due to declining loan yields and shrinking net interest margins, prompting banks to alleviate operational pressure. Experts suggest banks need to shift from scale expansion to strengthening risk control and industrial finance transformation.
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- 📰 Published: June 3, 2026 at 13:07
- 🔍 Collected: June 3, 2026 at 13:16 (9 min after Published)
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Multiple private banks in China have removed mid-to-long-term time deposit products. The main reason is the decline in loan yields, which further compresses interest margins if high-cost mid-to-long-term time deposit products are continuously offered. Some private banks have chosen to temporarily remove these products to alleviate operational pressure.
According to reports from Beijing Business Today and Securities Times, Zhongguancun Bank announced that starting May 30, it would temporarily remove its 3-year time deposit products for both individuals and institutions. In addition to Zhongguancun Bank, several other private banks, including Shanghai Huarui Bank, Hunan Sanxiang Bank, and Anhui Xin'an Bank, have also removed 5-year time deposit products from their apps.
Besides removing products, some private banks are tightening the supply of mid-to-long-term deposits through measures such as setting limits and controlling quantities. For example, Suzhou Bank currently only offers two types of 3-year time deposit products with annual interest rates of 2% and 1.95%, with the 2% product being sold in limited quantities every day at 9:00 AM.
Jiemian News cited an analysis from a banking industry insider, stating that the reason behind private banks removing mid-to-long-term time deposit products is the continuous decline in net interest margins.
A source from a private bank said that the products being removed are mainly high-interest deposit products and some automatic rollover products. Against the backdrop of relatively difficult loan business, some private banks are not short of deposits. "If loans cannot be issued, why would we need so many high-interest deposits?" the source said.
Jiang Han, a senior researcher at Pangu Think Tank, stated that as bank loan yields continue to decline, continuing to offer high-cost mid-to-long-term time deposit products will severely compress bank interest margins, potentially even turning negative. Removing high-cost mid-to-long-term time deposit products is an inevitable choice to alleviate operational pressure.
Jiang Han believes that private banks must change their past model of scale expansion, comprehensively strengthen their own risk control and customer acquisition capabilities, and at the same time, transform from a "retail-oriented" model to an "industrial bank" or "technology finance" model, and actively expand diversified financial services.
Another source from a private bank analyzed that the main reason some private banks are removing mid-to-long-term time deposit products is that these products have relatively high interest rates. However, with the current decrease in high-yield assets, private banks face cost pressure. By reducing the intake of high-interest long-term deposits, they can create conditions for stabilizing net interest margins.
According to reports from Beijing Business Today and Securities Times, Zhongguancun Bank announced that starting May 30, it would temporarily remove its 3-year time deposit products for both individuals and institutions. In addition to Zhongguancun Bank, several other private banks, including Shanghai Huarui Bank, Hunan Sanxiang Bank, and Anhui Xin'an Bank, have also removed 5-year time deposit products from their apps.
Besides removing products, some private banks are tightening the supply of mid-to-long-term deposits through measures such as setting limits and controlling quantities. For example, Suzhou Bank currently only offers two types of 3-year time deposit products with annual interest rates of 2% and 1.95%, with the 2% product being sold in limited quantities every day at 9:00 AM.
Jiemian News cited an analysis from a banking industry insider, stating that the reason behind private banks removing mid-to-long-term time deposit products is the continuous decline in net interest margins.
A source from a private bank said that the products being removed are mainly high-interest deposit products and some automatic rollover products. Against the backdrop of relatively difficult loan business, some private banks are not short of deposits. "If loans cannot be issued, why would we need so many high-interest deposits?" the source said.
Jiang Han, a senior researcher at Pangu Think Tank, stated that as bank loan yields continue to decline, continuing to offer high-cost mid-to-long-term time deposit products will severely compress bank interest margins, potentially even turning negative. Removing high-cost mid-to-long-term time deposit products is an inevitable choice to alleviate operational pressure.
Jiang Han believes that private banks must change their past model of scale expansion, comprehensively strengthen their own risk control and customer acquisition capabilities, and at the same time, transform from a "retail-oriented" model to an "industrial bank" or "technology finance" model, and actively expand diversified financial services.
Another source from a private bank analyzed that the main reason some private banks are removing mid-to-long-term time deposit products is that these products have relatively high interest rates. However, with the current decrease in high-yield assets, private banks face cost pressure. By reducing the intake of high-interest long-term deposits, they can create conditions for stabilizing net interest margins.