RBI directed Banks to maintain 100% CRR for the post demonetisation deposits:
The Reserve Bank of India (RBI) has taken steps to absorb excess liquidity in the banking system following demonetisation and said banks have to maintain 100 per cent cash reserve ratio (CRR) for the deposits they have received between September 16, 2016 and November 11, 2016.
The central bank clarified that the overall CRR requirement would stay at 4 per cent and the move will come into effect from the fortnight beginning November 26.
What is CRR?
CRR is the proportion of deposits that banks have to keep as cash with the central bank. Banks do not earn any interest on CRR balances kept with the RBI.
Purpose of RBI Notification:
This is intended to absorb a part of the surplus liquidity arising from the return of specified bank notes to the banking system, while leaving adequate liquidity with banks to meet the credit needs of the productive sectors of the economy.
Data of deposits:
According to latest RBI data, deposits in banks swelled by Rs.3.24 lakh crore between September 16 and November 11.