China is set to unveil its long-awaited deposit insurance scheme as early as the start of 2015, which will pave the way for the full liberalization of interest rates, well-informed sources said yesterday.

Multiple central government departments are finalizing the final stage of the scheme, including the People’s Bank of China and the China Banking Regulatory Commission, the sources said.

China’s deposit insurance may use practices commonly adopted in other nations, such as limited compensation for depositors and differential insurance premium rates for commercial banks.

Maximum compensation is likely to be set at 500,000 yuan (US$81,433) per depositor when a bank suffers insolvency crisis or bankruptcy.

A special agency will be set up to manage the deposit insurance fund, they said.

Deposit insurance is a measure used in over 10 economies to protect bank depositors, in full or in part, from losses caused by a bank’s inability to pay its debts when due. The scheme is one important component of a financial system safety net that safeguards financial stability. China has been discussing the setup of such a scheme for years.

Over the last two months, there have been rising signs the scheme was forthcoming, as senior Chinese officials had on four occasions mentioned expediting its establishment.

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