China's central bank announced Sunday it would cut the level of funds that commercial banks must hold in reserve by one percentage point, the second such move this year to boost lending.
The move, effective Monday, comes days after the world's second largest economy reported its worst quarterly growth figure for six years.
In a statement on its website, the People's Bank of China (PBoC) said the cut would "further enhance the ability of financial institutions to support restructuring".
The reduction in the reserve requirement ratio (RRR) -- the amount of cash banks must keep on hand -- follows a similar move in early February, which was the first across-the-board cut since May 2012.
Gross domestic product (GDP) growth slowed to 7.0 percent in the first quarter from 7.3 percent in the final three months of last year, marking the worst result in six years.
Growth in industrial output and retail sales slowed in March, while the figure for fixed asset investment also weakened in the first three months of the year, raising expectations of more efforts to shore up the economy.