China’s central bank said Tuesday that it will cut the reserve requirement ratio (RRR) for county-level rural commercial banks 2 percentage points starting Friday.
County-level rural cooperatives will have their RRR lowered by 0.5 percentage point.
The adjustments will strengthen the banks’ ability to provide financial services in rural areas, the People’s Bank of China (PBoC) said in a statement on its website. However, these will not have any impact on liquidity in the banking system.
The central bank will maintain a prudent monetary policy and keep growth in loans and social aggregate financing at a reasonable level, it said.
Meanwhile, China Banking Regulatory Commission vice chairman Zhou Mubing said that along with the RRR cuts, increased lending to small rural enterprises and securitization of agricultural loans will help boost the supply of funds, gov.cn reported.
China will soon introduce supportive policies on rural mortgage loans backed by farmers’ land contract rights and property rights, Zhou was quoted as saying.
Also, a financing guarantee fund will be established in some rural areas.
In a separate statement, the PBoC said China’s 8,127 small and micro loan companies had outstanding loans of 844.41 billion yuan (US$135.4 billion) as of end-March.
Jiangsu province had the largest outstanding loans among 31 areas at 115.81 billion yuan from 607 financial institutions.
Small and micro loans grew 25.1 billion yuan, in the first quarter, the PBoC said.
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