(Yicai Global) May 29 -- China's central bank has formed a company to oversee the nation's CNY82.1 billion (USD11.9 billion) of deposit insurance funds.

Reports emerged in March that the country may set up an independent institution to manage deposit insurance funds. The People's Bank of China registered the company in Beijing last Friday with capital of CNY10 billion (USD1.5 billion), public information shows. 

China established its deposit insurance system in May 2015. The scheme covers depositors up to CNY500,000 (USD723,65) per deposit account. A total of 4,017 Chinese banks had applied to join the scheme as of the end of 2018, according to data released by the PBOC Financial Stability Bureau in March. Last year, the funds generated CNY33 billion in total premiums and earned CNY1.1 billion in interest, and amounted to CNY82.1 billion, without expenditure or use.

The new company will handle equity, claim and fund investment; deposit insurance fund-related asset management; direct or commissioned acquisition, operation, management and disposal of assets; and operation of deposit insurance-related businesses, asset assessment and other businesses approved by national authorities.

But the company cannot raise public funds without approval, nor can it publicly carry out trading activities for securities products and financial derivatives or issue loans. It also cannot provide guarantees for firms in which it has not invested. Nor can it promise investors that the principal is not subject to losses or that they will earn a minimum income.