Financial regulators have granted eight mainland banks permission to issue a total of 25 billion yuan in interbank negotiable certificates of deposit (NCDs) in the Shanghai free-trade zone, following two years of tight liquidity conditions within the financial experiment and pet project of Premier Li Keqiang. The banks, including Agricultural Bank of China, China Construction Bank, Bank of China, Shanghai Pudong Development Bank and China Merchants Bank, disclosed plans for the issuances in filings to the National Interbank Funding Centre this week. Bank of China will make the first issuance on October 12 with a 500 million yuan product with a six-month tenor, the bank said in a filing. Banks were allowed to issue onshore large-denomination NCDs this year but developments within the Shanghai free-trade zone, particularly on rules for cross-border finance, have been unclear and often appear behind schedule. Tuesday marked the second anniversary of the opening of the zone yet the full extent of what businesses and banks can do inside the area, on the outskirts of Shanghai, remains somewhat elusive. Originally, officials said the project would be fully operational with three years of the launch. Cross-border NCDs will add to the small pool of offshore yuan liquidity in the free trade zone and help drive businesses and services in need of easy access to cash. "The problem is, if you need liquidity now, it's not that easy to get," said Banny Lam, co-head of research at ABC International Securities in Hong Kong. "Some companies can do stock market activities now [from within the zone] but they need a lot of liquidity to do that. NCDs will help." The mainland stock market rout that started in mid-June had slowed the development of the zone, Lam said. But recent stabilisation in the market could lead to more progress being made on moving forward with reforms. At the two-year mark for the Shanghai free-trade zone, the announcement on NCDs was likely a signal that cross-border reforms will push ahead. "For the onshore market, it is more of a symbolic move to signal continuous liberalisation of interest and exchange rates," said Sun Binbin, the chief fixed-income strategist at China Merchants Securities.