RBI increases Cash Reserve Ratio (CRR) by 0.50 per cent

Mumbai, Feb 13 (UNI) With a view to bring the rising inflation under control, the Reserve Bank of India (RBI) has increased the Cash Reserve Ratio (CRR) by one half of one per cent.

While the effective date for the CRR on net demand and time liabilities (NDTL) will be 5.75 per cent from February 17, it would be raised to 6.00 per cent from March 03.

In view of the paramount need to contain inflation expectations and in the light of current liquidity conditions, it has been decided to increase the cash reserve ratio (CRR) of scheduled commercial banks (SCBs), regional rural banks (RRBs), scheduled co-operative banks and scheduled primary (urban) co-operative banks by one-half of one percentage point of their net demand and time liabilities (NDTL) in two stages, a RBI notification here this evening said.

It is to be noted the Central Bank had said in its third quarterly review, which was released late last month, ''A determined and co-ordinated effort by all to contain inflation without unduly impacting the growth momentum is not only an economic necessity but also a moral compulsion.'' To the extent the essential inflationary pressures are attributable to monetary conditions, it is essential to undertake appropriate measure, in continuation of those already taken and in the light of anticipated developments, it had said.

UNI