The People's Bank of China (“PBC”)Shanghai Head Office; all regional branches and operations offices of the PBC; all central sub-branches of the PBC in capital cities of provinces (or autonomous regions) and the Central Sub-branch of the PBC in Shenzhen; Agricultural Development Bank of China; state-owned commercial banks; joint-stock commercial banks; and Postal Savings Bank of China:
For the purposes of increasing the positive incentives for the financial industry's support to “agriculture, rural areas, and farmers” and micro and small businesses, enhancing the precision and effectiveness of macro-economic control, and promoting reasonably adequate liquidity and the moderate growth of currency and credit supply, the PBC has decided to generally reduce the RMB reserve requirement ratios (RRRs) for financial institutions by 0.5% from October 24, 2015, and at the same time, reduce the RMB RRRs for financial institutions meeting relevant conditions by 0.5% (see Annex for details). You are hereby notified of relevant matters as follows:
I. The RMB RRR for Agricultural Development Bank of China shall be reduced to 9% by 1%.
II. For state-owned commercial banks, joint-stock commercial banks, urban commercial banks, non-county rural commercial banks, and foreign-funded banks which comply with prudential operation requirements and whose growth in loans provided to “agriculture, rural areas, and farmers” or micro and small businesses reaches a certain ratio in the previous year, the RMB RRR shall be reduced by another 0.5% on the basis of the general reduction by 0.5%.
(1) Compliance with prudential operation requirements means that: State-owned commercial banks and joint-stock commercial banks shall pass the assessment conducted in 2015 under the Measures for the Implementation of the Eligibility Prudential Assessment of Financial Institutions (Issued by Document No. 24 [2014] of the General Administration Department of the PBC); and the capital adequacy ratios of urban commercial banks, non-county rural commercial banks, and foreign-funded banks at the end of the third quarter of 2015 shall meet the minimum requirements set out in the Measures for the Administration of the Capital of Commercial Banks (for Trial Implementation) (Order No. 1 [2012], CBRC) and the Notice by the China Banking Regulatory Commission of Matters Concerning the Transitional Arrangements for the Implementation of the Measures for the Administration of the Capital of Commercial Banks (for Trial Implementation) (No. 57 [2012], CBRC).
(2) Reaching a certain ratio by the growth in loans provided to “agriculture, rural areas, and farmers” or micro and small businesses means that: In the previous year, the growth in domestic and foreign currency agriculture-related loans shall account for more than 15% of the growth in all domestic and foreign currency loans; or in the previous year, the growth in RMB loans for micro and small businesses (including business loans to individuals) shall account for more than 15% of the growth in all RMB loans.
(3) After this adjustment, the 17.5% RRR shall apply to state-owned commercial banks. Specifically, provided that the criteria of the targeted RRR reduction this time are met, the 17% RRR shall apply to those failing the criteria of the June 2014 targeted RRR reduction in the assessment conducted in early 2015; and the 16% RRR shall apply to those meeting the criteria of the June 2014 targeted RRR reduction in the assessment conducted in early 2015.
(4) After this adjustment, the 15.5% RRR shall apply to joint-stock commercial banks, urban commercial banks, non-county rural commercial banks, and foreign-funded banks. Specifically, provided that the criteria of the targeted RRR reduction this time are met, the 15% RRR shall apply to those failing the criteria of the June 2014 targeted RRR reduction in the assessment conducted in early 2015; and the 14% RRR shall apply to those meeting the criteria of the June 2014 targeted RRR reduction in the assessment conducted in early 2015.
III. The RMB RRR for county rural commercial banks shall be reduced to 12.5% by 1%. Specifically, for those with the local lending of newly absorbed deposits reaching a certain ratio, the RMB RRR shall be reduced to 11.5%.
IV. The RMB RRR for rural cooperative banks, rural credit cooperatives, and village banks shall be reduced to 9.5% by 1%. Specifically, for those with the local lending of newly absorbed deposits reaching a certain ratio, the RMB RRR shall be reduced to 8.5%.
V. The RMB RRR for Postal Savings Bank of China shall be reduced to 17% by 1%.
VI. The RMB RRR for finance companies, financial leasing companies, and auto finance companies shall be reduced to 7.5% by 0.5%.
The PBC Shanghai Head Office and all regional branches and sub-branches of the PBC shall effectively conduct work on the adjustment of RRRs in strict accordance with the relevant provisions, ensure smooth implementation, and in the case of major emergencies, report to the PBC in a timely manner.
The PBC Shanghai Head Office and all regional branches and sub-branches of the PBC shall forward this Notice to urban commercial banks, rural commercial banks, rural cooperative banks, rural credit cooperatives, village banks, finance companies, financial leasing companies, auto finance companies, and relevant foreign-funded financial institutions within their respective jurisdictions.
Annex: Adjustment Schedule of Reserve Requirement Ratios (Please refer to the Chinese version.)
The People's Bank of China
October 23, 2015
