China has cut the reserve requirements for some county-level financial institutions by 100 basis points, sources familiar with the matter said Friday.
The favorable reserve ratios, effective on April 1, will end on March 31, 2013.
The financial institutions were rewarded with the one percentage point lower reserve requirements because they managed to lend a certain percentage of loans to local businesses last year.
The People's Bank of China, the country's central bank, has been implementing a differentiated reserve requirement policy for county-level lenders to help boost lending, support local economies and improve rural financial services.
The reserve requirement is the amount banks must keep with the central bank rather than lend out.
People close to the matter did not specify how many county lenders will enjoy the lower reserve ratio policy.