Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If RBI decides to increase the percent of this, the available amount with the banks comes down. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks.
The Reserve Bank of India (RBI) raised the cash reserve ratio (CRR) for banks by a higher-than-expected 75 basis points. However, the key interest rates were left unchanged.
The Reserve Bank of India has hiked its cash reserve ratio by 75 bps to 5.75% as against 5% at its credit policy meet today. (100 basis points=1%) A CNBC-TV18 poll had forecasted a 50 bps CRR hike.
The move will be implemented in two stages. The first 50 bps hike will come into effect on February 13 while the next 25 bps hike will be effective February 27. The move will result in a mop-up of Rs 36,000 crore by February end.
The central bank has left unchanged the reverse repo, repo, and bank rate at 3.25%, 4.75%, and 6% respectively.
Checked the latest results in the below link……
http://www.rbi.org.in/home.aspx
Tags: Govt Of India, Indian Banks