Transfin.

RBI Grants Banks CRR Exemption for Auto, Housing, MSME Loans for 5 Years

Banks get CRR exemption for auto, housing, MSME loans for 5 years.

 

INDIA

Banks get CRR exemption for auto, housing, MSME loans for 5 years.

Room for Lending

The Reserve Bank of India (RBI) today announced that banks would not be required to maintain the cash reserve ratio (CRR) for five years on their deposits for an amount equivalent to loans given to the MSME (micro, small, and medium enterprises), housing and vehicles sectors between January 31st and July 31st.

 

This is likely to have “multiplier effects to support growth impulses”, the RBI noted in its recent Monetary Policy Committee bi-monthly meet. [BS]

 

Good to Know

Banks currently maintain 4% on their deposits as CRR.

  

Urban unemployment rate rises to 9.7% in January.

A Mixed Bag

As per data released by the Centre for Monitoring Indian Economy (CMIE), India had an unemployment rate of 7.16% in January, significantly lower than the 7.6% recorded in December.

 

Devil is in the Details

Rural unemployment fell to 5.97%, down from 6.93%, in the previous month. However, urban unemployment rose to 9.7% in January, up from 9% in December 2019 - close to its recent peak of 9.71% in August 2019. Meanwhile, the quality of jobs both in urban and rural India has been deteriorating.

 

Here are edited excerpts from a conversation between CMIE Managing Director and CEO Mahesh Vyas and Fortune India about the unemployment data. [Fortune India]

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