Neither affordable nor relevant

Is it time to review the need to maintain CRR funds with the central bank?

India’s banking regulator has the unenviable task of nursing the banking sector back to health as well as address macro growth challenges. On the one hand, the country's banks, particularly PSU banks, are struggling with reduced profit and eroding capital, on the other, the RBI’s is trying to revive credit growth by reducing the interest rate and enhancing liquidity. A wide range of decisions have been taken to address the issues facing industry. While the efforts continue it is somewhat surprising that not much action was seen on the cash reserve ratio (CRR) front. Indian banks currently maintain an estimated