Bank change to aid small businesses

China's central bank announced on Sunday it is cutting the cash required to be held in reserve in commercial banks by one-half percentage point starting July 5, a measure designed to make it easier to lend to small and microsized companies.

The amount of money, to be released by cutting the reserve requirement ratio in the five largest State-owned banks and 12 joint-stock commercial banks, could reach nearly 500 billion yuan ($76.9 billion), as the People's Bank of China, the central bank, estimated in a statement on its website.

This amount should be used "to support debt-to-equity swap projects on a market-oriented and legal basis, and to leverage the same amount of private capital participating in the investment", the statement said.