New Delhi, Feb. 4 -- A newly released State Bank of India report indicates that the Reserve Bank of India (RBI) may transition toward using the cash reserve ratio (CRR) primarily as a regulatory intervention tool rather than for routine liquidity management, marking a potential significant shift in monetary policy approach.

The analysis recommends a comprehensive revision of the central bank's current liquidity management framework, which presently employs multiple instruments including open market operations, CRR, and the repo rate.

The report specifically advocates for repositioning CRR, which determines the minimum cash reserves commercial banks must maintain, as a countercyclical liquidity buffer instead of its current role in short...