The Reserve Bank of India has announced an incremental cash reserve ratio (CRR) of 100 per cent for banks for the fortnight beginning November 26, 2016 in order to tackle the surge in deposits following demonetisation of Rs 500 and Rs 1000 notes.

•  It was intended to absorb a part of the large increase in liquidity in the system following the withdrawal of the legal tender status of ? 500 and ? 1,000 denomination bank notes.
• It was also indicated that the incremental CRR was purely a temporary measure and that it would be reviewed on December 9, 2016 or even earlier.