RBI to withdraw temporary CRR hike from Dec 10 fortnight

Earlier, the RBI hiked the CRR to 100% to absorb the extra liquidity created after the country banned higher-value notes

The Reserve Bank of India (RBI) said on Wednesday it would withdraw the temporary 100 per cent hike in the cash reserve ratio (CRR) announced late last month that was intended to absorb the extra liquidity created after the country banned higher-value notes.

The withdrawal will start in the fortnight beginning December 10, the RBI said in a statement.

The RBI temporarily hiked the CRR to 100 per cent as banks were awash with deposits as people turned in their abolished notes, but said the measure was no longer needed after the government agreed to issue special bonds to absorb the liquidity.