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PBOC to Cut Reserve Requirement for Qualifying Banks

By Han Wei and Wang Yuqian
The headquarters of the People's Bank of China (PBOC) is seen in Beijing on Sept. 28. A recent PBOC document shows the central bank is acting to direct more credit to rural and small businesses. Photo: IC
The headquarters of the People's Bank of China (PBOC) is seen in Beijing on Sept. 28. A recent PBOC document shows the central bank is acting to direct more credit to rural and small businesses. Photo: IC

(Beijing) — China’s central bank will ease capital requirements for qualifying financial institutions in an effort to direct more credit to rural and small businesses, according to a People’s Bank of China (PBOC) document dated Feb. 16.

The PBOC asked subsidiaries to assess local banks’ 2016 loan books, according to the document. It said banks meeting certain criteria will be eligible for a lower reserve requirement ratio (RRR) — the amount of cash that banks must hold in reserve — effective Feb. 27.

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