RBI Slashes CRR, Injects Rs 2.5 Lakh Crore Liquidity

The Reserve Bank of India (RBI) has opted for a significant monetary policy shift by cutting the Cash Reserve Ratio (CRR) by one percent. This strategic decision is set to release Rs 2.5 lakh crore in liquidity, empowering banks to extend loans to productive sectors and potentially stimulate economic growth, according to the RBI.

Announcing the policy change, RBI Governor Sanjay Malhotra highlighted the staged reduction in CRR, which will bring it down to 3% by the end of November 2025. This structured implementation aims to enhance lending capacity across the banking sector while maintaining a stable economic environment.

The move is anticipated to not only lower funding costs for banks but also reinforce the transmission of monetary policy to the credit market. With economic growth previously dipping to a four-year low of 6.5%, the RBI's initiative is expected to elevate credit flow and bolster financial conditions.

(With inputs from agencies.)