Study Of Deposit Interest Pricing Strategies Of Commercial Bank On The Background Of Interest Rate Liberalization

Since 2012,The People’s Bank of China accelerates adjustment of the frequency of deposit benchmark interest rate,then deposit interest rate floating range is widening.On October 24,2015,The People’s Bank of China let go the upper limit of deposit interest rates on commercial banks and rural cooperative financial institutions,interest rate liberalization towards "the last kilometer".This policy brings a great change to the financial industry’s operating environment and the market competition in banking is more vigorous.Foreign practice shows that interest rate liberalization can reduce margin of lending,deposit of bank and take moral risk,etc.Interest rate liberalization gives banks more independent pricing power,at the same time,the frequent fluctuation of interest rate exerts a certain impact on earning of commercial banks.Therefore,during the situation of interest rate liberalization,our country commercial bank interest rates need to promptly formulate and improve pricing strategies to achieve the purpose of effectively avoiding interest rate risk may happend and seizing nice market opportunities,working hard to enhance the market competitiveness of commercial banks and risk resist capacity.During Interest rate liberalization,urban commercial banks show strong sensitivity and high price risk,etc.This article selects N bank as a representative of urban commercial banks in China,to deeply investigate its deposit pricing.The first combed the theory of interest and from profit,competition,demand three guidance to summary the pricing strategy.On the basis of theory,using SWOT analysis of N bank deposit pricing found that N bank pricing reaction rapidly and the concept of differentiation advanced but its interest rates is to high and differentiation exploration is not deeply enough.Then through transverse longitudinal analysis: since 2012,with nearly six times of deposit interest rate floating range adjustment,comparing N banks deposit pricing trends with other commercial bank in deposit interest rate pricing,finding N Banks exist problems as following: without viable benchmark interest rate curve;deposit pricing model integrated is not strong;deposits interest rate overpriced and lack of differentiation.Based on the deposit pricing theory and combined with N bank SWOT analysis,simulating N bank’profit of three pricing strategy to put forward the following deposit pricing strategy:setting up a market benchmark interest rate curve,setting up comprehensive deposit pricing model,using the demand-based pricing strategy and using FTP pricing mechanism to control risk.And I suggest that in the process of implementing deposit pricing strategy,the bank should improve the FTP pricing mechanism and risk management;control and reduce operating cost;adjust the concept of strategic,creating "citizens bank" to improve customer service;strength autonomous pricing system to ensure the effective implementation of the deposit pricing strategy.