RBI raises banks' average CRR requirement
The Economic Times reports that the Reserve Bank of India has raised the average cash reserve ratio (CRR) that banks must maintain. The RBI also posted a notice under Section 42(1) of the RBI Act headed 'Change in Daily Minimum Cash Reserve Maintenance Requirement'. We have not seen the size of the change or its effective date, so we do not state them.
A higher CRR forces banks to park more cash with the RBI, which reduces the money available to lend and absorbs surplus liquidity.
Loan rates do not change overnight, but tighter liquidity can push lending and deposit rates up over time.
Read the RBI notice for the new percentage and the date it takes effect before drawing conclusions.
DailyDrop India edition No. 6 · Morning · SAT., OCT. 10, 2026