BEIJING (Reuters) - China's central bank said it will cut the level of deposits that banks have to keep with it by 50 basis points for some lenders, a move aimed at freeing up more cash for loans to bolster flagging economic growth.
The People's Bank of China said in a statement on its website that the reduction would be effective from June 16, and will apply to banks whose new loans to the farm sector last year exceeded 50 percent of total new lending for 2014. It is also a requirement that outstanding loans to the farming sector exceeds 30 percent of total outstanding loans.
The central bank said in a short statement that current liquidity in China's banking system was ample, and that the direction of the country's monetary policy had not changed.
Banks' reserve requirements are neither uniform or transparent in China. Smaller banks tend to have lower RRRs than major banks, which had an RRR of 20 percent in 2012.
Reporting by Shao Xiaoyi and Koh Gui Qing; Editing by Jacqueline Wong