Midsize Chinese banks will likely benefit most from the central bank’s latest targeted cut in the reserve requirement ratio (RRR), Caixin reports. To encourage more lending to the disadvantaged population, college students and small businesses, commercial banks will be allowed to set aside less cash as reserves after meeting certain targets beginning next year. Each bank’s RRR will be cut by 0.5 percentage point, from the current range of 13.5% to 17.0%, if at least 1.5% of its new loans are extended to those less-creditworthy borrowers. A deeper cut of RRR by 1.5 percentage point will kick in if that ratio is at least 10%. Morgan Stanley projects that about 300 billion yuan ($45.3 billion) of cash could be freed from reserves when the RRRs are cut next year, while Northeast Securities pegs a range of 300 billion to 450 billion yuan. Analysts believe that could be particularly helpful to midsize banks.