Mumbai: The Reserve Bank has extended cut in the mandatory deposit requirement by banks to Regional Rural Banks and co-operative banks in a bid to further ease pressure on liquidity.
The Cash Reserve Ratio (CRR) has been reduced by 50 basis points to 8.5% of the net demand-and-time liabilities from the fortnight beginning October 11, RBI said in two separate notifications.
Currently, CRR requirements for regional rural banks, scheduled state co-operative banks and scheduled primary (urban) co-operative banks is 9%.
Earlier during the week, RBI reduced CRR for scheduled commercial banks to 8.5% with the intention to release Rs 20,000 crore in the financial system facing liquidity problem arising out global turmoil. The cut in the ratio happened after a gap of five years. RBI last reduced the CRR by 25 basis points in June 2003. The announcement comes three weeks ahead of a scheduled half-yearly review of the credit policy. ——PTI
