RBI eases cash reserve rules to ease liquidity condition of banks

Written by September 27, 2018 08:26

New Delhi: The Reserve Bank of India (RBI) today eased mandatory cash requirement rules for banks to provide “durable liquidity” to the economy.

RBI in a statement said banks could ‘carve out’ up to 15 per cent of holdings under the statutory liquidity reserves to meet their liquidity coverage ratio (LCR) requirements as compared to 13 per cent now.

RBI eases cash reserve rules to ease liquidity condition of banksRBI further announced the relaxation in statutory liquidity ratio (SLR) requirement with effect from October 1, 2018.This will supplement the ability of individual banks to avail of liquidity,from the repo markets.

RBI in a statement said that it stands ready to meet the durable liquidity requirements of the system through various available instruments.

RBI eases cash reserve rules to ease liquidity condition of banksCiting proactive steps taken in the last few days, RBI said it conducted open market operation (OMO) on September 19.It further said that another OMO will be conducted to ensure adequate liquidity in the system.

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