Money in the bank: Debate over cash reserve ratio's utility grows

Indians are flocking to invest in stocks, putting pressure on banks which need to strike a balance between deposits and loans

Is the cash reserve ratio (CRR) a deadweight on banks? Of every Rs 100 raised by banks in deposits, Rs 4.50 is locked up and it earns nothing by way of interest. The CRR framework is in the spotlight because one, a good number of folks now opt to park their monies in bourse-linked investments. In this financial year, Rs 603,280 crore moved in to mutual funds (MFs) compared Rs 354,701 crore in FY24; deposit growth in the same period (incremental) is at Rs 846,980 crore (Rs 2,431,312 crore). And two, banks’ credit-deposit (CD) ratio is in