- The Reserve Bank of India (RBI) has decided to discontinue the incremental cash reserve ratio (I-CRR) in a phased manner.
- The I-CRR was introduced in August 2023 to absorb surplus liquidity in the banking system.
- The I-CRR required banks to maintain a portion of their incremental deposits with the RBI.
- The RBI will reduce the I-CRR in two phases.
- In the first phase, the I-CRR will be reduced from 10% to 7.5% effective September 16, 2023.
- In the second phase, the I-CRR will be further reduced to 5% effective October 14, 2023.
- The RBI has taken this decision to ensure that there is adequate liquidity in the system to meet the credit needs of the economy.
- The discontinuation of the I-CRR will also free up resources for banks to lend to businesses and consumers.
- The RBI has also announced other measures to improve liquidity in the system, such as increasing the amount of money that banks can lend against government securities.
You can read the complete blog on the website here: RBI decides to discontinue I-CRR in a phased manner | Angel One.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.