Retain but reward CRR

An interesting issue that has come up for discussion is the relevance of the cash reserve ratio (CRR). CRR is spoken of quite often just before RBI announces its monetary policy as it is a signal of the stance of the central bank on monetary easing. CRR today is 4.75% and there is a section of bankers who feel that this is a drag on the system as it constrains them.

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