The Reserve Bank of India (RBI) would discontinue the

Solution

The I-CRR was introduced on August 10, 2023, by the RBI to absorb the surplus liquidity generated by various factors, including the return of Rs 2,000 notes to the banking system.   The Reserve Bank of India (RBI) would discontinue the incremental cash reserve ratio (I-CRR) requirement imposed on banks and return the seized funds in phases.Out of the total I-CRR maintained, 25 per cent will be disbursed on September 9, another 25 per cent on September 23, and the remaining on October 7. It was estimated that around Rs 1 trillion worth of liquidity was held  due to the I- CRR requirement.  During the August review of the monetary policy, the RBI mandated all scheduled banks to maintain an I-CRR of 10 percent on the increase in their net demand and time liabilities (NDTL).