RBI Cuts CRR By 100 Bps To 6.5% - Oct 16, 2008

The Reserve Bank of India on Oct 15 cut the Cash Reserve Ratio (CRR) by 100 basis points. It said that the CRR cut would release Rs 40000 crore. RBI also raised ceilings on FCNR and NRE deposit rates by 50 bps each. This is the third CRR cut in the past nine days. The total cut is 250 bps. The Central bank also hiked the amounts that banks can raise from overseas unit. It said that RBI would provide more liquidity to meet the MF need. The banks can borrow 0.5 per cent of deposits for MF needs. The Reserve Bank stressed that the CRR cut was committed to maintain financial stability. It also assured that it would to review measures on a continuous basis.