The Chinese central bank has unveiled plans to launch reduced required reserve ratios for certain small-scale banking institutions servicing rural areas.
The People’s Bank of China (PBOC) has just announced that starting from 15 May 2019 it will “apply comparatively low preferential required reserve ratios to small and medium-sized banks in focal areas servicing county regions.”
Rural village commercial banks that only operate within their own county-level administrative areas or whose branches in other county-level administrative areas have assets of less than 10 billion yuan will have a reserve ratio that is the same as that for rural village credit societies, which is currently set at 8%.
According to PBOC approximately 1000 rural commercial banks in China’s county regions will qualify for the preferential policy, releasing long-term funds of approximately 280 billion yuan, all of which will be used for private enterprises and micro and small-enterprises.
