In the past week a number of banks have started to limit the amount of money that can be moved onto any fund platform through what is essentially a 'quick-pay' function. This allows a user to save their banking information into the system so that buying an online fund, Yuebao or otherwise, is 'one-click'. Currently 12 banks have implemented limits and although banks announce that setting up daily transfer limits is in the interest of capital safety, we believe estimate that the fundamental reason is due to the large loss of deposit arising from money funds, which have led to RMB bn 83.39 decline in new cumulative deposit this January and February, comparing with corresponding period last year. It is estimated that the transfer limits may directly influence money funds’ funds absorption capability and the growth of these money funds may slow down.
Depositing via online banking or other non-'quickpay' channels is still unlimited, but clearly the banks are a bit on their back foot here in meeting the online fund challenge and still keeping their deposit marketshare.