The RBI just made a quiet but powerful move that could reshape how ban

@aspirantai_official

#UPSC#Economy

The RBI just made a quiet but powerful move that could reshape how banks manage their cash.

Starting October 16, banks must now keep 99% of their mandated CRR (Cash Reserve Ratio) on hand every single day; up from just 90%. That’s not a small shift. It’s a tightening of the tap. Why now? Because there’s ₹3.88 lakh crore of extra cash sloshing around the banking system; a surplus caused partly by the end of the FCNR-B deposit scheme, which brought in foreign currency from NRIs. The RBI isn’t just whispering; it’s acting. Alongside this, they’re selling ₹25,000 crore in government bonds and raised the repo rate to 5.50%. All of this? Designed to pull excess cash out of the system before inflation gets restless. For job aspirants: Know this; CRR is cash parked with RBI, not invested. It’s a tool for liquidity control. And now, with 99% daily maintenance, banks have less wiggle room. That affects lending, interest rates, and even how much money flows into the market. Big picture? This isn’t just about numbers. It’s about the RBI staying ahead of inflation, even when the economy seems calm. Smart move. And one you’ll likely see in your exams. Remember: 3% CRR stays. But 99% daily maintenance? That’s the new rule. #RBI #CRR #Banking #Economy #UPSC #SSC #BankExams