China's central bank said Wednesday reserve requirements for six rural banks in the eastern province of Zhejiang will be adjusted back to 16 percent from Nov. 25.
The People's Bank of China implemented differentiated reserve requirements for rural lenders. Every November, the central bank will review rural banks' credit situations during the first three quarters, and raise their reserve requirements by 50 basis points if the banks fail to lend enough to rural farming businesses, the central bank's Zhejiang branch said.
The six banks' reserve requirements were raised to 16.5 percent following the central bank's review last year.
Therefore, the recent move by the central bank can not be interpreted as cutting reserve requirements for the six banks, the branch said.
The central bank said earlier this month it will continue its prudent monetary policy and make full use of its monetary tools to promote reasonable credit growth and encourage financial institutions to increase support for rural residents and micro- and small-sized enterprises.