The Reserve Bank of India (RBI) has unveiled a plan to gradually discontinue the Incremental Cash Reserve Ratio (I-CRR) in response to evolving liquidity conditions. This strategic move aims to ensure that the financial system remains stable and money markets operate smoothly.
The RBI has outlined a phased release of the I-CRR funds. On September 9, 25% of the I-CRR will be released, followed by another 25% on September 23. The remaining 50% of the I-CRR will be released on October 7.
The RBI Governor, Shaktikanta Das, introduced the I-CRR, mandating all scheduled banks to maintain a 10% reserve ratio on the increase in their net demand and time liabilities (NDTL) between May 19, 2023, and July 28, 2023. The objective was to absorb surplus liquidity stemming from various factors, including the reintroduction of ₹2,000 notes into the banking system.
Governor Das emphasized that the I-CRR was always intended as a “temporary measure” to address the liquidity surplus. The net impact of this incremental CRR, according to the RBI’s internal calculations, amounted to slightly over ₹1 lakh crore.
This phased discontinuation of the I-CRR is a significant development in India’s monetary policy, aiming to maintain financial stability and manage liquidity in a controlled manner.
In Uttar Pradesh, certain areas are recognized by specific regional names that highlight their historical,…
Haryana is a state in northern India known for its rich history and industrial growth.…
The NITI Aayog has recommended adding coking coal to India's critical minerals list, emphasizing its…
UK Prime Minister Keir Starmer announced the resumption of Free Trade Agreement (FTA) negotiations with…
COP29 marked a significant milestone in global efforts to address climate change within the tourism…
Bali is home to a rich cultural heritage that blends Hindu philosophy, local animist traditions,…