RBI decides to discontinue incremental cash reserve ratio in a phased manner
RBI review on I-CRR: The measure was intended to absorb the surplus liquidity generated by various factors, including the return of Rs 2000 notes to the banking system.
RBI review on I-CRR: The Reserve Bank of India (RBI) on Friday (September 8) decided to discontinue the incremental cash reserve ratio (I-CRR) in a phased manner. The central bank had announced the measure in its August 10 monetary policy meeting wherein scheduled banks were required to maintain an I-CRR of 10 per cent on the increase in their net demand and time liabilities (NDTL) between May 19, 2023, and July 28, 2023. The measure was intended to absorb the surplus liquidity generated by various factors, including the return of Rs 2000 notes to the banking system.
"It was indicated that the I-CRR is a temporary measure for managing the liquidity overhang and that the I-CRR will be reviewed on September 8, 2023, or earlier with a view to returning the impounded funds to the banking system ahead of the festival season," it had said.
Based on an assessment of current and evolving liquidity conditions, the RBI said that it has been decided that the amounts impounded under the I-CRR will be released in stages so that system liquidity is not subjected to sudden shocks and money markets function in an orderly manner. The release of funds would be as follows:
Source: RBI press release
As much as 93 per cent of Rs 2000 currency notes that were in circulation on May 19 -- the day when the currency was withdrawn from circulation -- have been returned to banks.
The total value of Rs 2000 banknotes received back from circulation is Rs 3.32 lakh crore up to August 31, 2023.
Post-development, banking stocks rallied. Last seen, the S&P BSE Bankex was trading 294 points, or 0.58 per cent higher at 50,581.37 levels. Federal Bank, AU Small Finance Bank, and SBI were all trading higher.
(With PTI inputs)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Senior Citizen Latest FD Rates: Know what major banks like SBI, PNB, Canara Bank, HDFC Bank, ICICI Bank are providing on fixed deposits
Gratuity Calculator: Rs 38,000 as last-drawn basic salary, 5 years and 5 months of service; what will be gratuity amount?
EPFO Pension Schemes: Early pension, retirement pension, nominee pension and 4 other pension schemes that every private sector employee should know
Top 5 Small Cap Mutual Funds with best SIP returns in 1 year: See how Rs 25,000 monthly investment has grown in each scheme
Top 7 SBI Mutual Funds With Best SIP Returns in 1 Year: Rs 25,000 monthly SIP investment in No.1 fund has jumped to Rs 3,58,404
03:56 PM IST