The Reserve Bank of India (RBI) has announced a reduction in the cash reserve ratio (CRR) for banks by 50 basis points to 4 percent, as stated by Governor Shaktikanta Das during his monetary policy address on Friday.
The CRR is the portion of deposits that banks are required to hold in cash. This reduction will be implemented in two phases, each of 25 basis points, effective from December 14 and December 28.
Governor Das highlighted that this move will release approximately 1.16 trillion rupees into the banking system. Prior to this decision, the central bank had maintained its key interest rate.
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