RBI to Restore Cash Reserve Ratio in Two Phases to 4 Pc
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The Reserve Bank on Friday decided to restore the cash reserve ratio (CRR) in a phased manner to 4 per cent in light of improved liquidity condition in the market. The CRR is the percentage of the total deposit that banks have to mandatorily park with the apex bank. The move to raise CRR would suck about Rs 1.37 lakh crore primary liquidity from the banking system.
To help banks tide over the disruption caused by COVID-19, the CRR of all banks was reduced by 100 basis points to 3.0 per cent of net demand and time liabilities (NDTL) effective from the reporting fortnight beginning March 28, 2020. The dispensation was available for a period of one year ending March 26, 2021.
RBI to restore the cash reserve ratio in two phases to 4%
February 05, 2021
Quality lending, if undertaken, may enhance profitability for banks - istock/Denis Vostrikov×
CRR will go up from 3 per cent to 3.5 per cent effective from March 27, and to 4 per cent effective from May 22
The Reserve Bank of India (RBI) has decided to gradually restore the cash reserve ratio (CRR) in two phases in a non-disruptive manner. This move is based on a review of monetary and liquidity conditions.
CRR, which is the slice of deposits that banks maintain with the RBI, will go up from 3 per cent to 3.5 per cent effective from March 27, 2021, and to 4.0 per cent effective from May 22, 2021.
Read more about RBI to restore cash reserve ratio in 2 phases to 4% over improved liquidity on Business Standard. The CRR is the percentage of the total deposit that banks have to mandatorily park with the apex bank
RBI To Include NBFCs Under Long-Term Operations
Feb 05 2021, 6:15 PM
February 05 2021, 11:28 AM
February 05 2021, 6:15 PM
The Reserve Bank of India will allow banks to extend credit to non-banking finance companies under the targeted long-term repo operations scheme.RBI Governor Shaktikanta Das announced this and other liquidity and regulatory measures on Friday along with the monetary policy committee s decision to hold key policy rates and maintain an accommodative stance.The TLRO scheme, announced in March last year, was aimed at providing funds to s.
The Reserve Bank of India will allow banks to extend credit to non-banking finance companies under the targeted long-term repo operations scheme.
Regulating NBFCs
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RBI’s proposed regulation for NBFCs is not disruptive, but seems to focus on systemic risk
After dropping broad hints about the need to tighten the screws on non-banking finance companies (NBFCs) post the IL&FS and Dewan Housing Finance (DHFL) failures, the Reserve Bank of India has floated a discussion paper that doesn’t seem to materially disrupt the sector’s regulatory regime. It suggests classifying NBFCs into four layers based on size and activity so that they can be subjected to differing degrees of regulation. Most players appear to be rather relieved about the paper, which has kept off recommending a Cash Reserve Ratio or a Statutory Liquidity Ratio requirement for NBFCs to bring them on a par with banks.