Updated By: LatestGKGS Desk
Note Ban: RBI introduced CRR rate to be applicable from 26th Nov
Reserve Bank of India has introduced an incremental Cash reserve Ratio of 100% beginning from 26th November 2016
The RBI has taken this decision to absorb the liquidity in banking system due to demonetisation.
RBI will review the decision on 9th December as the incremental CRR is the temporary measure taken by the Reserve Bank of India.
RBI taken decision to absorb excess money from banks
RBI aims to absorb the excess liquidity from the entire banking system arising from the return of Rs.500 and Rs.1000 denomination note.
In return RBI will leave the adequate liquidity with the banks so that they can provide credit to the productive sectors of the economy.
Due to demonetisation, there has been a large surge in deposits which relatively expand the banks credit leading to a large excess liquidity in the system.
