The People's Bank of China has established a relending facility to support technological innovation and transformation, showcasing the central bank's commitment to providing accurate and effective support for the real economy. 

The new facility is aimed at encouraging financial institutions to beef up lending to technology-oriented small and medium-sized enterprises as well as projects that involve technology transformation and equipment upgrade in key areas, the PBOC said on Sunday.

Built upon two previous relending facilities serving similar policy objectives, the new facility has a quota of 500 billion yuan ($69.1 billion), offers a favorable interest rate of 1.75 percent and a term of one year, the central bank said.

Eligible financial institutions — a total of 21 policy banks and commercial banks — can make lending decisions on their own and apply to the PBOC for funding support via the new facility and receive relending funds amounting to 60 percent of the principal of their loans for qualified projects.

The move is part of the country's initiative to launch a new round of equipment upgrading and aligns with the central bank's efforts to enrich its toolkit, after its monetary policy committee vowed at a recent meeting to amplify the intensity of monetary policy that has been launched.