The People’s Bank of China decided to cut the amount of cash banks must hold as reserves by one percent from April 20, in a move to speed up economic growth, the central bank announced.

For rural credit cooperatives and banks in towns and villages, the rate of the savings deposit reserve fund will be lowered by a further one percentage point. Banks in towns and villages will enjoy the same rate as rural credit cooperatives, according to the central bank.

The Agriculture Development Bank of China will enjoy an additional two percentage points reduction.

State-owned banks and other shareholding commercial institutions that have lent a certain ratio of their money to small and micro-sized enterprises or people related to agriculture, rural areas and farmers will qualify for a cut of an additional 50 basis points in the reserve requirement ratio, Xinhua news agency reported.

This is in a bid to further enhance financial institutions’ capability to join in the nation’s efforts to optimize its economic structure, help small and micro-sized enterprises, better deal with tasks related to agriculture, rural areas and farmers, and support key water conservancy projects, according to the central bank’s statement.