RBI CRR Cut Expected To Boost Liquidity And Bank Margins

Reserve Bank of India’s (RBI) first reduction in the cash reserve ratio (CRR) since March 2020 is expected to provide significant liquidity to the banking system. Bankers anticipate this will help cool down bulk deposit rates, which could result in a 3 to 5 basis point improvement in bank net interest margins (NIM), benefiting the overall financial sector.