RBI relaxes cash balance requirements for lenders

The Reserve Bank of India (RBI) on Wednesday allowed lenders to include old 500 and 1,000 rupee notes as part of their cash balance, a move that analysts said would make it easier for the sector to fulfill their cash reserve ratio requirements.

In a statement, the central bank said that all scrapped currency notes held in their chests will be counted as part of their cash balance.

Analysts said the move would help banks adhere to the RBI's sharp hike in the CRR announced on Saturday.

The RBI said it will review the decision in the second half of February.