① On July 22, Minsheng Bank's official website published an article stating that from July 26, 2024, the bank will completely stop the “Payroll” service. ② Driven by factors such as reducing competitive diversion pressure and narrowing interest spreads requiring cost reduction and efficiency, the cost of products such as “Xinyingbao” advances to provide customers with a “T+0” experience will face cuts.
Financial Services Association, July 23 (Reporter Peng Kefeng) Everything has a cycle, and financial products are no exception.
On July 22, Minsheng Bank's official website published an article stating that from July 26, 2024, the bank will completely stop the “Payroll” service. According to Minsheng Bank's previous official information, Xinyingbao was officially launched in July 2017. This also means that this cash management product, which was launched for individual customers and once sparked controversy in public opinion, was announced to end of life seven years later.
Minsheng Bank issued a document to stop the “Xinyingbao” service from July 26
According to the specific arrangements announced by Minsheng Bank, starting from July 25, 2024, the bank will stop the automatic subscription function for the “Payroll” service, that is, July 24, 2024 will be the last day to accept automatic subscriptions. Starting from July 26, 2024, the bank will completely stop the “Payroll” service, and will no longer support “Payroll” quick redemption and automatic redemption (including: withdrawals, transfers, POS purchases, credit-card related repayments, and automatic deductions).
Minsheng Bank stated that the cessation of the “Xinyingbao” service will not affect clients' fund product holdings, subscriptions, and redemptions. After the “Xinyingbao” service is discontinued, customers can handle position inquiries, subscription and general redemption services for lower-level monetary fund products held by customers through the “Xinyingbao” service at the counter, online banking or mobile banking fund area. According to the rules of the stock trading day, after initiating an “ordinary redemption” application, the redemption funds will be credited on the T+1 securities trading day.
Launched 7 years ago, it once caused controversy
According to Minsheng Bank's previous official information, “Xinyingbao” is a cash management product launched by the bank for individual customers. It was officially launched in July 2017.
This product is based on the bank's existing rapid redemption (T+0) business. By seamlessly encapsulating the automatic subscription of the fund and the external payment automatically triggering the T+0 redemption transaction, after the customer signs up the product, the remaining funds after deducting the customer's balance of demand funds are automatically purchased according to the customer's agreement to achieve the income of the monetary fund; when the customer performs payment operations, it automatically triggers T+0 redemption transactions in the card.
“Xinyingbao” attracted public attention around 2020, and at one point attracted a lot of criticism. According to media reports at the time, some users reported that “Xinyingbao” signed a contract by default and also promoted high returns to the outside world, which is suspected of misleading investors.
In May 2020, in response to public questions, Minsheng Bank officially replied that there were no cases where customers were unaware or careless in handling this business. Regarding the “high yield” description of Xinyingbao's products on the mobile banking page, Minsheng Bank said that it means that the historical average return of monetary funds is higher than current deposit interest.
Minsheng Bank also stated that one of the main functions of the Xinyingbao product is automatic subscription, that is, when the customer's current available funds exceed the set minimum current deposit amount, the bank's system will automatically initiate a monetary fund subscription at 3 p.m. on weekdays according to the customer's contract settings for the portion of the funds that can be used on demand in excess of the set minimum current reserve amount. After signing the contract, customers can log in to the “Payroll” module of mobile banking or online banking to check their balance and related transaction details.
or adjust based on cost pressure
A number of interviewed industry insiders told the Financial Federation reporter that products with both current liquidity and cargo base income, such as “Xinyingbao,” were defensive products promoted by various banks in the face of internet financial competition back then, mainly to preserve customer capital and debt bases.
“The biggest cost is how to absorb the capital costs of providing 'T+0' to customers, which is actually equivalent to bank advances to meet customer liquidity requirements. Now, on the one hand, there is no diversion effect of treasure products; on the other hand, bank interest spreads are under pressure, and careful calculation is also required.” A head of the stock bank's retail business department told reporters.
A Financial Services Association reporter noticed that recently Minsheng Bank not only announced that it would stop the “Xinyingbao” service, but also announced to the outside world that it would stop rapid redemption services for some monetary funds. According to industry insiders, the business logic behind it is basically the same, and the adjustments are mainly based on cost pressure.
