Business

RBI To Gradually Reduce Incremental Cash Reserve Ratio Maintenance

The Reserve Bank of India said on Friday that it will phase out the incremental cash reserve ratio (I-CRR) requirement imposed on banks by October 7.

The central bank stated that 25% of the I-CRR money will be released on September 9, another 25% on September 23, and the remaining 25% on October 7.

In a statement, the RBI said, “Based on an assessment of current and evolving liquidity conditions, it has been decided that the amounts impounded under the I-CRR would be released in stages so that system liquidity is not subjected to sudden shocks and money markets function in an orderly manner”.

After this decision, banking sector liquidity fell into deficit for the first time this fiscal year, but it has since risen to nearly 750 billion rupees ($9.05 billion).

Indian banking stocks rose since the move was mostly beneficial to lenders.

The RBI instructed banks in August to hold an I-CRR of 10% on deposits increased between May 19 and July 28, removing nearly 1 trillion rupees of banking sector liquidity.

Advance tax payments are expected around September 15, with GST outflows scheduled for September 20. Traders anticipate total outflows of 2.2 to 2.5 trillion rupees.

Also read: Rishi Sunak Arrives in Delhi; Says He Feels Special; Called Lovingly India’s Son-In-Law

Spriha Rai

Recent Posts

Hina Khan Hails 11 Years Of PM Modi’s Leadership; Highlights National Progress

As the nation marks 11 years under PM Modi's leadership, actress Hina Khan shares her…

1 hour ago

Subhash Ghai Hails PM Modi’s Transformative Vision For India

Subhash Ghai has praised PM Narendra Modi’s leadership for catalysing India’s growth and changing the…

1 hour ago

India & Central Asia Boost Rare Earth Cooperation At Delhi Meet

India and five Central Asian nations have agreed to deepen cooperation on rare earths and…

2 hours ago

PM Modi’s Beej Se Bazaar Tak Vision Reshapes Indian Agriculture

Prime Minister Modi has redefined Indian agriculture with the ‘Beej Se Bazaar Tak’ vision, transforming…

3 hours ago

EV Sales Cross 4% Mark In May; Signalling Steady Shift To Green Mobility

EV sales topped 4% of passenger vehicle retail in May 2025, signalling growing demand for…

3 hours ago

Self-Reliant Defence Industry Marks India’s Strategic Security Ascent

One year into Modi 3.0, reforms have reduced poverty, strengthened defence, and accelerated the digital…

3 hours ago