Without Reserve

State Bank of India ( SBI) chairman Pratip Chaudhuri has hit the nail on the head. The (interest-free) cash reserve ratio (CRR) that banks are compelled to keep with the Reserve Bank of India (RBI) is a non-performing asset (NPA). For now, the suggestion to scrap it might be out of tune with the RBI's effort to tighten liquidity. But there is no mistaking that this is a desirable long-term policy goal.

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