The Reserve Bank of India (RBI) has raised the minimum daily cash reserve ratio (CRR) maintenance requirement to 99% from 90%, effective mid-October. However, Jefferies expects the impact on banks’ net interest margins to be limited, adding that lenders may be able to pass on the higher costs to borrowers.
In a notification on Friday, the RBI said banks will have to maintain a minimum daily balance equivalent to 99% of the CRR requirement from the fortnight beginning October 16, up from 90% so far.
