RBI cuts CRR by 100 bps to 3% in phased manner, to inject Rs 2.5 lakh crore liquidity into banking system

The policy stance was also revised to ‘neutral’ from ‘accommodative.’

In a significant move on June 6, the Reserve Bank of India (RBI) announced a 100 basis point cut in the Cash Reserve Ratio (CRR), from 4 percent to 3 percent, to be implemented in four tranches of 25 bps each.

The step is expected to inject Rs 2.5 lakh crore into the banking system, boosting liquidity and supporting credit flow.

The reduction in the CRR cut will start from fortnights beginning September 6, October 4, November 1 and November 29, 2025, RBI Governor said.

RBI Governor said besides providing durable liquidity, it will reduce the cost of funding of the banks, thereby helping in monetary policy transmission to the credit market.

Alongside the CRR cut, the Monetary Policy Committee (MPC) voted to reduce the repo rate by 50 basis points to 5.50 percent, marking the third consecutive rate cut by the central bank. The policy stance was also revised to ‘neutral’ from ‘accommodative.’

On the inflation front, the RBI lowered its CPI inflation forecast for FY26 to 3.7 percent from 4 percent, reflecting easing price pressures, particularly in food and fuel segments.

The central bank, however, kept its real GDP growth projections unchanged for the second half of FY26, with forecasts at:

6.7% for Q2FY26
6.6% for Q3FY26
6.3% for Q4FY26