The People's Bank of China ("PBC") has recently issued the Announcement of the People's Bank of China [2019] No.15 (the "Announcement").
The Announcement states that: 1. As from August 20, 2019, the PBC will authorize the National Interbank Funding Center ("NIFC") to publish the market-based loan prime rates (LPR) at 9:30 a.m. on the 20th date of each month (automatically postponed to the first working day following a national holiday or festival) which will be made open on the official website of the NIFC and of the PBC; 2. The scope of banks that will offer the market-based LPRs will be expanded from the previous ten national banks to 18 banks including not only national banks but also city commercial banks, rural commercial banks, foreign-invested banks and privately-owned banks, with a view to making the offered market-based LPRs more representative, and such scope will be reviewed and adjusted on a regular basis in the future; 3. The market-based LPRs will be offered for the loans of two different terms, namely the one-year loans and the loans of over five-year term, rather than merely for the loans of the one-year term in the past, and banks will determine the interest rates of the one-year loans and the loans of over five-year term by reference to the market-based LPRs for the loans of corresponding terms, while the interest rates of the loans of the term shorter than one year or longer than one year but shorter than five years will be set by banks based on the loans of terms selected at their own discretion.