The statutory liquidity ratio was reduced by 50 bps to 19.5% of banks' net demand and time liabilities.
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has decided to hold the key policy rate unchanged at 6% as it sees risks to inflation.
The statutory liquidity ratio was reduced by 50 bps (basis point) to 19.5% of banks' net demand and time liabilities. However, it maintained the neutral stance of the policy.
While five members of the MPC are in favour of the decision, one member - Ravindra Dholakia, voted for a 25 bps cut in the policy rate.
The RBI said inflation is expected to rise from its current level and range between 4.2-4.6% in the second half of this year.
“As noted in August policy, there are factors that continue to impart upside risks to this baseline trajectory,” the RBI said.