BEIJING -- Chinese banks cautiously restarted issuing certificates of deposit (CDs) on Monday after the central bank two weeks ago ended nearly two decades of suspension.

Nine commercial banks, including the State-owned "big five", issued large-scale CDs to institutions and individuals, with terms ranging from three months to one year and interest rates generally 1.4 times the benchmark level.

Rates for one-year terms were set unanimously at 3.15 percent by all lenders, falling short of market expectations and indicating prudent strategies taken for the first issuing.

Insiders attributed the cautious rate to the fact that CDs were still in a testing period, it is expected rates will rise according to market response in the future.

The subscription threshold for institutions is 10 million yuan ($1.64 million) while for individuals it is 300,000 yuan.

The People's Bank of China on June 2 released regulations on CDs after the initiative was halted in 1997, providing a fresh investment channel and accelerating interest rate liberalization.

CDs were popular among institutional investors but less favored by individuals on Monday.

China CITIC Bank issued CDs worth 4.69 billion yuan to companies on Monday, with all its one-year term products sold out. Individuals purchased CDs worth only 369 million yuan.

With lower risks and higher returns, CDs are attractive to firms, especially foreign-funded enterprises that have high working capital requirements, said Xiang Songzuo, chief economist at the Agricultural Bank of China.

CDs are high-rate time deposits and can be traded or pledged.

However, the first batch of CDs are not tradable among investors after issuance and can not be mortgaged for loans. Banks said they will issue tradeable CDs in the future.

Analysts believe CDs will push China's market-oriented reforms of interest rates, allowing banks to bypass current rate controls.

China has loosened its grip on lending rates, but the ceiling on deposit rates is still retained at 1.5 times the benchmark, with full liberalization considered only a matter of time.