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CRR-exempted loans: RBI says deduction only on incremental lending

Updated : February 27, 2020 11:55 PM IST

In its bid to boost retail credit flow, the RBI on February 6 announced that incremental loans towards automobile purchases, residential housing and loans to MSMEs will be set against the mandatory cash reserve ratio (CRR).
This means that for any fresh loan to these three segments, the banks need not set aside the mandatory 4 per cent of deposits as CRR.
The RBI also said the incremental loans to the factoring units of MSMEs discounted under the trade receivables discounting system (TReDs) are also eligible for CRR exemption.
CRR-exempted loans: RBI says deduction only on incremental lending

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