Summary:

The Reserve Bank of India (RBI) will reduce the Cash Reserve Ratio (CRR) by 1%, injecting Rs. 2,50,000 crore (US$ 29.15 billion) into the banking system to boost lending in productive sectors. The reduction will occur in four stages of 25 basis points each, culminating on November 29, 2025, lowering the CRR to 3%. This move will increase banks’ lending capacity, reduce funding costs, and improve monetary policy transmission. RBI Governor Sanjay Malhotra stated that the bank remains vigilant about liquidity and financial conditions. Since January, Rs. 9,50,000 crore (US$ 110.79 billion) in durable liquidity has been injected, shifting the system from deficit to surplus, although the full impact on the credit market is still emerging.

Source: IBEF

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