Taking swift action to inject about Rs 60,000 crore (Rs 600 billion) into the cash-strapped system, the Reserve Bank on Friday announced additional 1 per cent cut in mandatory requirements for banks to keep cash with the central bank over and above 0.50 per cent reduction announced earlier.
With this, a total 1.50 per cent cut in Cash Reserve Ratio to 7.50 per cent will come into effect from tomorrow.
"Accordingly, on a review of the evolving liquidity situation in the context of global and domestic developments it has been decided to reduce CRR by 150 basis points to 7.50 per cent with effect from the fortnight beginning October 11, 2008 instead of 50 basis points reduction announced on October 6, 2008," RBI said in a statement in Mumbai.
Text: PTI
Image: A security officer stands guard outside the Reserve Bank of India headquarters in Mumbai | Photograph: Indranil Mukherjee/AFP/Getty Images
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