In an attempt to absorb some of the surplus liquidity available in the banking system, the Reserve Bank of India (RBI) on Saturday asked banks to maintain an incremental cash reserve ratio (CRR) of 100%, effective the fortnight ended November 26, reports fe Bureau in Mumbai. The move is estimated to suck out around Rs 3.24 lakh crore excess liquidity from the system and will be applicable on deposits between September 16 and November 11 fortnights.
RBI said the incremental CRR is intended to be a temporary measure within its liquidity management framework to drain excess liquidity in the system and shall be reviewed on December 9 or even earlier.
As per RBI data, total deposits rose from Rs 97 lakh core in the September 16 fortnight to Rs 101.1 lakh crore in the November 11 fortnight. The central bank said the CRR remains unchanged at 4% of NDTL.