China's central bank has reiterated its ban on unfair and illegal competition in attracting bank deposits.

The People's Bank of China issued a circular recently, stressing the need to rectify financial order.

The circular noted that some local financial institutions have been blindly pursuing deposit growth by introducing unfair or illegal means of competition, such as raising interest rates to snare a larger share of the market. These irregularities have resulted in increased costs for banking institutions and disrupted financial order.

The central bank urged all financial institutions in China to strictly abide by relevant regulations on the prohibition of raising interest rates, and punish those bank branches which attract deposits through unfair and illegal means.