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India cenbank cuts banks' cash reserve ratio to ease liquidity conditions

The cash reserve ratio, or CRR, is the proportion of deposits that banks need to set aside as cash

Published: Fri 6 Dec 2024, 9:17 AM

The Reserve Bank of India (RBI) has decided to cut banks' cash reserve ratio by 50 basis points to 4 per cent, Governor Shaktikanta Das said in his monetary policy address on Friday.

The cash reserve ratio, or CRR, is the proportion of deposits that banks need to set aside as cash.

The cut will be in two tranches of 25 basis points each, kicking in on December 14 and December 28.

The reduction in CRR would free up 1.16 trillion rupees in the banking system, Das said.

Earlier, the central bank maintained its key interest rate.

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