Credit availability improved due to RBI’s action
By Neelima Shankar
Nov 20, 2012
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Reserve Bank of India has put more money into circulation and due to this the credit availability has seen a marked improvement in 2012-2013. This is illustrated in terms of the funds which is locked up within the RBI and other scheduled banks in relation to the total currency in circulation among the public.

Bank deposits with the scheduled commercial bank and the Reserve Bank of India as a proportion of total currency in circulation fell from 87 per cent to 64 per cent at the starting of the current financial year as on March 31, 2011.

There was a 16 per cent reduction in the amount of funds kept with the banks and the RBI. In FY10, 82.4 per cent of the total currency in circulation were kept with RBI and scheduled commercial bank.

There was a cut in the Cash Reserve Ratio by the RBI from 6 per cent to 5.5 per cent in January, 2012. But later in February, the CRR was further slashed to 4.75 per cent.


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