New Delhi, June 19 -- The recent cut in the Cash Reserve Ratio (CRR) during the monetary policy announcement by the Reserve Bank of India is expected to create room for additional credit growth of 1.4-1.5 per cent, according to a report by the State Bank of India (SBI).

The move is likely to strengthen liquidity in the banking system and improve credit flow to the economy.

It said "CRR cut will free-up lendable resources which will get headroom equivalent to 1.4-1.5% of additional credit growth"

Credit growth in FY24-25 slowed to around 12 per cent compared to 15 per cent in the previous year. The slowdown was partly attributed to stricter regulatory measures taken by the Reserve Bank of India (RBI). But with CRR and repo rate cuts it ...