- The Reserve Bank of India announced a cut in Bank Rate by 0.50 percentage point, from 7.0 per cent to 6.50 per cent to touch its lowest since May 1973.
The RBI reduced CRR by 2.0 percentage points from 7.50 per cent to 5.50 per cent, releasing on additional liquidity of Rs 60 billion to banks.
- Most of the exemptions available on CRR removed.
Interest rate paid on eligible CRR balances increased further to the level of Bank Rate i.e. 6.5 per cent (from 6.0 per cent since April 21, 2001 and 4.0 per cent earlier).
All the exemptions on the liabilities will be withdrawn, except inter-bank, for the computation of net demand and time liabilities for CRR, with effect from the two-week period beginning November 3, it said.
The policy measures will release about Rs 80 billion, of which about 60 billion will be available from November 3, the RBI said.
Monetary Policy stance will continue as in the first half of the year.
In view of global uncertainties, the RBI considers a projection in the range of 5.0 per cent to 6.0 per cent growth rate for 2001-02 as reasonable for monetary management.
The RBI aims to strengthen financial system and efforts towards this direction will continue.
RBI has provided operational flexibility to banks in "Loan System" for credit delivery.
RBI has initiated steps to closely monitor non-SLR investments by banks and financial institutions.
The RBI Current Account Facility will also be rationalised.
