In addition, the central government's control on the credit boom means a strict limit on the amount of money that grassroots financial services can lend on a monthly basis, resulting in a very low loan-to-deposit ratio.

A slight adjustment in the current monetary policy can enable grassroots banks to better play their role in stimulating agricultural production and to ease the difficulties of financial service shortages in rural areas, he said.

Rural banking opens to individuals

Private banks to be on the rise

Wednesday's meeting also hammered out other favorable policies to better finance China's agricultural sector. More grassroots banks providing services for rural residents in villages and townships will be set up, and private capital will be allowed to hold a higher ratio of shareholdings in these financial institutions. The government will also improve the policy of offering subsidiaries for agricultural insurance as well as set up a prevention mechanism to protect farmers from natural disasters and other catastrophes.

According to the provincial branch of the Agricultural Bank of China in Zhejiang, the branch has issued nearly 440,000 debit cards with a special reduced interest rate and commission fee to rural residents in the province since 2008.

It has also provided loans of about 1 billion yuan to nearly 5,000 households in the last six years. Local rural residents are able to pledge houses, forest ownership, land ownership, large agricultural machineries and fishing vessels as security for loans.

Currently, there are 39 sub-branch offices under the Agricultural Bank of China operating in the county-level administrative areas in Zhejiang.

To serve rural residents, the branch bank has installed 1,300 financial service stations in convenience stores at local townships and villages, where residents are able to transfer money, top up cell phones or do other simple business transactions without going to sub-branch offices far away from their village.

Apart from financial support for the agricultural sector, it was agreed at the Cabinet's meeting on Wednesday to extend until the end of 2016 the tax redemption policy till for companies that hire unemployed people. Under the policy, college graduates who start their own business after graduation, and enterprises that hire unemployed and disabled people, will be able to receive a tax redemption.

Earlier, the premier set the creation of 10 million jobs annually as the minimum that the government needs to ensure.

Hu Yuanyuan contributed tothis story.