RBI announced discontinuation of I-CRR in a phased manner

The Reserve Bank of India (RBI) has decided to discontinue the I-CRR in a phased manner. CRR is the percentage of deposits that banks have to keep with the RBI. RBI’s decision to remove the CRR is aimed at boosting lending and economic growth. A lower CRR will free up more funds for banks to lend to businesses and consumers. This will help to stimulate demand and investment, which will in turn lead to higher economic growth.

Here are some of the benefits of removing the CRR:

It will free up more funds for banks to lend, which will boost economic growth.
It will reduce the cost of borrowing for businesses and consumers, which will make it easier for them to invest and spend.
It will make the Indian rupee more attractive to foreign investors, which will help to boost the economy.

Based on an assessment of current and evolving liquidity conditions, it has been decided that the amounts impounded under the I-CRR would be released in stages so that system liquidity is not subjected to sudden shocks and money markets function in an orderly manner.

According to the RBI, the release of funds would be as follows:

Date	Amount to be released (₹ crore)
September 9, 2023	25 per cent of the I-CRR maintained
September 23, 2023	25 per cent of the I-CRR maintained
October 7, 2023	50 per cent of the I-CRR maintained

The RBI’s decision to remove the CRR is a positive step that is likely to boost economic growth. However, the RBI will need to carefully monitor the situation and take steps to mitigate any potential risks.