The Chinese central bank will cut the reserve requirement ratio (RRR) for small and medium commercial banks starting from May 15, the People's Bank of China said on Monday morning.

After the cut, the RRR for about 1,000 rural commercial banks which operate in counties will be 8 percent, down from the current level of 10 percent to 11.5 percent for small-sized banks, according to the central bank.

Lowering the banks' reserves will inject about 280 billion yuan ($41.23 billion) for long-term usage. And the freed fund will be used for providing more loans to private, micro and small companies, the bank said in a statement.

That will further reduce funding cost for micro and small companies. It is also an implementation of the State Council's pledge to set up a lower RRR policy framework for small and medium-sized banks, according to the statement.