Core Viewpoint - The banking sector is implementing aggressive pricing strategies for credit card cash installment services, with interest rates dropping significantly to attract customers and expand retail loan volumes [1][4]. Pricing Strategy - Some banks have introduced limited-time promotional activities for credit card cash installment services, with interest rates as low as 1.6 times the base rate, resulting in annualized rates below 3%, with the lowest at 2.76% [1][2]. - For example, China Merchants Bank's "e-zhaodai" product offers a special promotion with an annualized rate of 2.76% for 12-month installments [2]. - Other banks, such as CITIC Bank and Bank of Communications, have also launched competitive rates, with annualized rates ranging from 3.09% to 5.66% depending on the terms [3]. Market Dynamics - The consumer loan market has seen intense competition, leading to a price war, which was temporarily halted by regulatory measures that set a minimum annualized interest rate of 3% for consumer loans [4]. - Cash installment services are not subject to the same regulatory constraints, allowing banks to offer lower rates without violating regulations [4]. Strategic Objectives - Banks aim to attract more customers through lower rates while maintaining strict credit standards to minimize default risks [5]. - This strategy not only alleviates consumer financial pressure but also supports the growth of retail loan volumes and customer bases [5]. Profitability Concerns - While the low-rate strategy may attract customers in the short term, it poses risks to long-term profitability as banks rely on fee income from cash installment services [5]. - A reduction in interest rates could lead to decreased fee income, potentially impacting overall operational efficiency if risks are not adequately managed [5].