The People’s Bank of China has established a deposit insurance fund management company with registered capital of 10 billion yuan (US$1.45 billion) to protect depositors’ savings at financial institutions, according to official administration information.

The move came after the Chinese authority took control of the Baoshang Bank after citing “severe credit risk.” Huang Xiaolong, deputy head of the financial stability bureau of the People’s Bank of China, will act as the legal representative and executive director of the company.

PBoC established the deposit insurance fund in 2015 and has collected insurance premiums from depository financial institutions since then. The new company is the first independent entity to manage the fund, which amounted to 100 billion yuan at the end of 2018.

According to the rules, depositors could receive up to 500,000 yuan in compensation if a bank is insolvent. The rule also allows the PBoC and the State Council to adjust the up-limit of the compensation to match future developments.