Cash Reserve Ratio (CRR)
RBI's CRR Latest Update
Latest Release
April 9, 2025
Actual
4.0%
Previous
4.0%
- Having evaluated the evolving macroeconomic circumstances, the Monetary Policy Committee (MPC) opted to maintain the Cash Reserve Ratio (CRR) at its existing level of 4.00 percent.
- The decision was taken by the Monetary Policy Committee (MPC) at its 54th meeting held from April 7 to 9, 2025.
- This reflects the RBI’s view that banking system liquidity remains adequate and that no immediate adjustment to the CRR is required to support growth or manage inflation, even as other policy rates were revised during the meeting.
Historical RBI's Cash Reserve Ratio Chart
Cash Reserve Ratio (CRR) Chart - Historical & Current Trends
Analyze CRR Changes Over Time
RBI's Cash Reserve Ratio (CRR) overview
CRR (Cash Reserve Ratio) is the percentage of a bank’s total deposits that bank must keep as cash with the RBI. This money cannot be used for lending or investment purpose. To manage money supply, inflation and liquidity in the Indian economy, the RBI uses CRR.
RBI's Cash Reserve Ratio (CRR) Change Impact
Higher CRR means > Banks have less money to lend > Less liquidity in the economy > Helps control inflation.
Lower CRR means > Banks have more money to lend > More liquidity in the economy > Encourages borrowing and boosts economic growth.
In short, when CRR increases banks try to attract deposits from people but loan growth also gets affected. On the other hand, when CRR decreases banks try to encourage people and businesses to take loans and it also helps boost the growth.
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Important
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FAQs
What is CRR and how does it work?
The Cash Reserve Ratio (CRR) is basically the portion of a bank’s total deposits that it has to set aside as cash with the RBI. Banks aren’t allowed to use this amount for lending or investments. It’s one of the ways the RBI keeps a check on the money supply, inflation, and liquidity in India’s economy.
What is the difference between CRR and SLR?
CRR is the portion of cash that banks are required to keep with the RBI, and they don’t earn any interest on it. On the other hand, SLR is a reserve that banks maintain in the form of approved securities, like government bonds or gold, which can earn them returns. While CRR helps control liquidity, SLR plays a role in ensuring the bank’s stability and solvency.
What are the objectives of CRR?
CRR has two key roles: it helps keep a portion of bank deposits safely with the RBI to safeguard depositors’ money, and it works as a handy tool for managing liquidity and keeping inflation in check.
What is CRR’s effect on economy and inflation?
When the CRR goes up, banks have less money to lend, which helps keep inflation in check by reducing the money supply. On the flip side, lowering the CRR gives banks more room to lend, potentially boosting economic growth, though it’s important to keep an eye on it since it could also raise inflation if not carefully managed.
How CRR is calculated?
CRR is essentially a fixed portion of a bank’s Net Demand and Time Liabilities (NDTL), which includes money from savings, current, and fixed accounts. It’s calculated using a simple formula: CRR = CRR rate (%) × NDTL.