The PBOC is very prudent about making any more changes to the interest rate. It is nearly impossible to reduce the rate when it already stands at such low a level.
China has speeded up the overhaul of its banking sector to improve corporate governance and debt quality. Efforts include pouring funds into bigger, healthier players and encouraging them to go public overseas.
The move signals a more market-oriented interest rate system in China.
Investors are going after Merchants Bank stock as the revised plan is better than expected.