The Reserve Bank of India has cut the cash reserve ratio by 100 basic points. The decision of the apex bank is aimed to ease the liquidity problem in the financial system. Almost all financial bodies were demanding cut in the CRR from the RBI to improve liquidity condition in the Indian market. The move of the apex bank would release Rs 60,000 crore of bank deposits in the market. The cash reserve ratio is that proportion which banks reserve with the central bank.

Total 1.5 percent cut would be applicable from October 11. The apex bank has also decided to defer the auction of government bonds. The bank was earlier planning to carry out selling bonds of Rs 10,000 crore under its annual borrowing. The RBI in a statement said that it is watching the global economic scenario and take appropriate steps to galvanize Indian economy from the external economic and financial factors.