A depositor opens an account of certificates of deposit (CDs) at a division of China Construction Bank in Hangzhou, capital of east China's Zhejiang Province, June 15, 2015. Nine banks, including the "big four" state-owned lenders, start issuing the country's first batch of large-scale CDs on June 15. [Photo: Xinhua]

Nine Chinese banks, including the "big four" state-owned lenders, have started to issue the country's first batch of large-scale certificates of deposit (CDs) today.

Much of the first batch will have terms of one year or less.

The subscription threshold for individual investors is 300-thousand yuan or about 49-thousand U.S. dollars.

While that for institutions is 10 million yuan.

Previously, China only allowed CDs to be issued and traded among banks.

Lu Zhengwei, chief economist at Industrial Bank, says the move is a key step in China's market-oriented reform of interest rates.

"China is on its way to fully establishing a market-oriented interest rate mechanism. Issuing the CDs is the second to last step towards that end because China has already removed its grip on lending rates. Under the new regulations, the interest on the CDs can be either fixed or floating. Those with floating rates will use the Shanghai Interbank Offered Rate as a benchmark. And market-oriented deposit rates will need a reference rate."

As a key component of China's broader economic and financial reforms, interest rate liberalization is high on policy makers' to-do list this year.The central bank governor Zhou Xiaochuan said in March that the possibility for China to fully liberalize its interest rate mechanism is "very high" this year.

Freer interest rates will give private businesses easier access to credit, aiding the economy's transformation towards more service and consumer driven growth.