The latest policy for bank loans is the conversion of LPR interest rates. According to the latest news in June 2020, banks can only choose LPR interest rates for loans now. Customers with fixed interest rates in the past can choose whether to switch to LPR interest rates.

Currently, LPR includes two varieties: one-year term and more than five-year term. LPR has a high degree of marketization and can fully reflect the supply and demand of funds in the credit market. Using LPR for loan pricing can promote the formation of market-oriented loan interest rates and improve the transmission efficiency of market interest rates to credit interest rates.

On April 20, 2020, the People's Bank of China authorized the National Interbank Funding Center to announce that the loan market quoted interest rate (LPR) on April 20, 2020 was: 1-year LPR was 3.85%, which was higher than the previous period. The 20 basis points drop in the first period was the largest rate cut since the LPR reform in August last year; the LPR over 5 years was 4.65%, a decrease of 10 basis points from the previous period.

Extended information:

Quoting Bank Requirements

LPR quoting banks should comply with the requirements of the macro-prudential policy framework and have established an internal rate of return curve and an internal transfer pricing mechanism. It has strong independent pricing capabilities, and has formulated management measures for the bank's loan market quotation interest rates, as well as other conditions that are conducive to carrying out quotation work.

The market interest rate pricing self-discipline mechanism assesses the quotation quality of quoting banks, regularly adjusts the members of quoting banks, supervises and manages the operation of loan market quoted interest rates, and regulates the behavior of quoting banks and designated issuers.

Baidu Encyclopedia-LPR