The Reserve Bank of India on 5th February 2021 has decided to gradually restore the Cash Reserve Ratio in two phases in a non-disruptive manner.
The CRR is the percentage of the total deposit that banks have to mandatorily park with the apex bank and in order to 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.
However, based on the review of monetary and liquidity conditions, it has been decided to gradually restore the CRR in two phases in a non-disruptive manner. Banks would now be required to maintain the CRR at 3.5 per cent of NDTL effective from the reporting fortnight beginning 27th March, 2021 and 4.0 per cent of NDTL effective from fortnight beginning 22nd May, 2021.
