(Yicai Global) Jan. 17 -- China's central bank will cut its targeted reserve ratio for inclusive finance on Jan. 25 to make credit available to more societal groups, it said on social media today.
The ratio at banks whose loan balances are 1.5 percent occupied by such groups will be lowered by 0.5 percentage points. At lenders where the figure is over 10 percent, it will fall by 1.5 percentage points.
The People's Bank of China announced in September that it would cut the ratio for qualified commercial banks to help financial institutions develop inclusive finance. Under the new requirements, banks will be expected to lend more to small enterprises, rural households, the poor, students and other groups.
China's banking regulator published guidelines in May which urged large and medium-sized banks to set up inclusive finance units and increase loans for money-starved small firms, agriculture and poverty relief, state-owned news agency Xinhua reported.
The reserve ratio is the percentage of deposits that commercial banks must hold with PBOC to cover withdrawals by clients and other institutions. The benchmark ratio is 16.5 percent for large lenders and 13 percent for smaller ones.