RBI has reduced Cash reserve ration by 75 basis point

Reserve Bank of India has reduced cash reserve ratio by 75 basis points. Cash reserve ratio is the ratio of which banks need to deposit the part of their money with the RBI. This will reduce the rate of interest and loans interest rate. RBI has issued a circular no. 86 dated 09-03-2012 about this issue. Full circular is as under.

RBI/2011-12/435
UBD.BPD. (SCB). Cir.No.3/12.03.000/ 2011-12
March 9, 2012
The Chief Executive Officers of
All Scheduled Primary (Urban) Co-operative Banks
Madam / Dear Sir,
Section 42(1) of the Reserve Bank of India Act, 1934 - Maintenance of CRR
Please refer to our Circular UBD (PCB).CIR.No.2/12.03.000/2011-12 dated January 25, 2012 on the captioned subject.
2.  On review of the current and evolving liquidity conditions as set out in the Reserve Bank's Press Release 2011-2012/1441 dated March 9, 2012, it has been decided to reduce the Cash Reserve Ratio (CRR) of Scheduled Primary (Urban) Co-operative Banks by 75 basis points from 5.50 per cent to 4.75 per cent of their Net Demand and Time Liabilities (NDTL) with effect from the fortnight beginning March 10, 2012.
3.  A copy of the relative notification UBD.BPD. (SCB).DIR.No.7/12.03.000/ 2011-12 dated March 09, 2012 is enclosed.
4.   Please acknowledge receipt.
Yours faithfully,
(L.M. Kamble)
General Manager-in-Charge
Encl: 1

UBD.BPD. (SCB). DIR.No.7/12.03.000/ 2011-12
March 9, 2012
Notification
In exercise of the powers conferred under the sub-section (1) of Section 42 of the Reserve Bank of India Act, 1934, and in partial modification of the earlier notification UBD.(PCB).DIR.No.6/12.03.000/2011-12 dated January 25, 2012, the Reserve Bank of India hereby notifies that the average Cash Reserve Ratio (CRR) required to be maintained by every Scheduled Primary (Urban) Co-operative Bank shall be 4.75 per cent of its net demand and time liabilities, from the fortnight beginning March 10, 2012.
(S. Karuppasamy)
Executive Director




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