Tuesday, 5 April 2016

News on RBI Repo Rate & CRR with Equity Tips

The Reserve Bank of India (RBI) today heard the government's clarion call, cutting its policy repo rate by 25 basis points to bring it down to 6.50 percent at the first bi-monthly monetary policy meeting of the fiscal year.

Cash Reserve Ratio has been kept unchanged, Statutory Liquidity Ratio (SLR) of scheduled banks, has been reduced by 25 basis points from 21.5 percent to 21.25 percent of Net Demand and Time Liabilities (NDTL).

Repo rate is the rate at which the central bank lends to banks. CRR and SLR are percentage of liabilities that banks have to hold in cash and liquid assets, respectively.

More importantly, the central bank announced steps to boost liquidity in the system which would help banks pass on the benefits of lower rates to its borrowers. 

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