RBI simplfy Cash Reserve Rules to ease Liquidity Condition of Banks

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 percent of holdings under the statutory liquidity reserves to meet their liquidity coverage ratio (LCR) requirements as compared to 13 percent now.
RBI 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. Citing 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.

Published On : 28 Sep 2018