China News Service, March 13th. According to the central bank's website, in order to support the development of the real economy and reduce the actual cost of social financing, the People's Bank of China decided to implement inclusive financial targeted reductions on March 16, 2020. Directional reduction of 0.5 to 1 percentage point. In addition, the qualified joint-stock commercial banks will be further reduced by 1 percentage point to support the issuance of loans to the inclusive financial sector. The above-mentioned targeted RRR cuts totaled 550 billion yuan of long-term funds.
The People's Bank of China implements a prudent monetary policy, is more flexible and appropriate, and puts support for the recovery and development of the real economy in a more prominent position. It does not engage in flooding, considers internal and external balance, and maintains a reasonable and adequate liquidity. Adapt to economic development, and create a suitable monetary and financial environment for high-quality development and supply-side structural reform.
Relevant person in charge of the People's Bank of China said: targeted reduction in support of real economy development
Q: How does the targeted reduction of the quota support the development of the real economy?
A: The targeted long-term funds release of 550 billion yuan will be released, of which 400 billion yuan will be released to banks that meet the criteria for inclusive financial directional reduction standards, and an additional 1 percentage point will be released for eligible joint-stock commercial banks. 150 billion yuan in long-term funds. The targeted downgrade of long-term funds has effectively increased the stable funding sources for banks to support the real economy, and can directly reduce the cost of interest payments of relevant banks by about 8.5 billion yuan each year. It will help promote the reduction of the actual interest rates of small and micro-enterprises and private enterprises through bank transmission. Direct support for the real economy. The targeted RRR cuts take into account both active promotion and after-the-fact incentives, and use of market-oriented reforms to unblock the transmission of monetary policy will help stimulate the vitality of market players, further play the decisive role of the market in resource allocation, and support the development of the real economy.
Q: What are the specific contents of the targeted reduction of inclusive finance?
Answer: The People's Bank of China has established an annual review system for inclusive financial targeted reduction since 2018, giving large and medium-sized commercial banks with a certain percentage of loans in the inclusive financial sector a preferential reserve ratio of 0.5 percentage points or 1.5 percentage points. Inclusive finance loans include farmer production and operation loans, filed loans for the poor, consumer loans, student loans, business guarantee loans, individual business loans, business loans for small and micro-enterprise owners, and single-family credits less than 10 million Small business loans, micro-enterprise loans with a single household credit of less than 10 million. The assessment targets include large banks, joint-stock banks, city commercial banks, larger rural commercial banks and foreign banks. Recently, the People's Bank of China completed the assessment in 2019. Some compliant banks have changed from the original reserve ratio discount to 0.5% reserve ratio discount, and some banks have changed from 0.5% discount to 1.5% discount. Look, the targeted reduction of these qualified banks was 0.5 to 1 percentage point.
Q: What are the reasons for the additional targeted reduction of the qualified joint-stock commercial banks?
Answer: Medium-sized banks represented by joint-stock commercial banks are an important part of China's banking system. Considering that the People's Bank of China has implemented targeted reductions for eligible rural commercial banks and city commercial banks last year, all large commercial banks in this inclusive financial reduction will receive a 1.5% reserve ratio discount. The quasi-positive incentives support joint-stock banks to issue loans in the inclusive financial sector, while optimizing the "three-tier and two-excellent" deposit reserve ratio framework. This time, the joint-stock commercial banks that receive a preferential reserve ratio of 0.5 percentage points will be further targeted At the same time, it requires that the reduction of funds be used to issue loans to the inclusive financial sector, and the interest rate of loans has dropped significantly, thereby increasing credit support for inclusive financial sectors such as small and micro enterprises and private enterprises.