RBI Cuts CRR by 100 Bps in Phases from Sep 2025
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- By Chetan Kulasri
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- Last Updated on 9 June, 2025
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Circular No. RBI/2025-26/46 DoR.RET.REC.23/12.01.001/2025-26, Dated 06.06.2025
The Reserve Bank of India (RBI) has announced a phased reduction of the Cash Reserve Ratio (CRR) for all banks by a total of 100 basis points. This strategic move aims to enhance liquidity in the banking system and support economic activity.
1. Scope of Reduction
The reduction will be implemented in four equal tranches of 25 basis points each, applied to the Net Demand and Time Liabilities (NDTL) of scheduled banks. This calibrated approach ensures a smooth transition and minimizes any potential disruption in the banking sector.
2. Revised CRR Requirements and Effective Dates
Banks are required to maintain the CRR as follows:
- 3.75% of NDTL – Effective from the reporting fortnight beginning September 6, 2025
- 3.50% of NDTL – Effective from October 4, 2025
- 3.25% of NDTL – Effective from November 1, 2025
- 3.00% of NDTL – Effective from November 29, 2025
3. Objective and Impact
This move is expected to enhance the lending capacity of banks by freeing up more funds for credit deployment. The gradual implementation is aimed at ensuring financial stability, while enabling the transmission of monetary policy more effectively in support of growth and investment.
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