New rules good for Yu'ebao

The central bank's new rules to impose reserve requirements on interbank deposits are good news for online monetary funds such as Yu'ebao, a fund manager said in a statement on Monday.

The attractiveness of deposits from monetary funds to banks will be increased, as the central bank has decided to temporarily set the reserve requirement ratio for interbank deposits at zero, said Wang Dengfeng, fund manager of Tianhong Asset Management Co, which launched Yu'ebao with Alipay.

In contrast, big commercial banks in China are required to put aside 20 percent of their regular bank deposits as reserves.

Absorbing deposits from monetary funds will also help banks expand the base for calculating the loan-to-deposit ratio so that banks could lend more to clients, Wang said.

Currently Chinese banks are allowed to lend up to 75 percent of their deposits.