Home Loans to Get Cheaper in India

India’s central bank, RBI (the Reserve Bank of India) has announced to reduced cash reserve ratio (CRR) rate by 50 bps on Jan. 24, 2012 in its third quarter monetary policy review. RBI will release Rs 32,000 crore to banks that will make Home loans and other loans to individuals and businesses cheaper.

The CRR, which is the level of deposits that banks have to mandatorily maintain with RBI, was reduced to 5.5% from 6%. This marks RBI's first reduction in CRR since January 2009 when it had released funds to stimulate demand in the wake of the Lehman Brothers crisis.

The next mid-quarter review of Monetary Policy for 2011-12 will be announced on Thursday, March 15, 2012. The Monetary Policy for 2012-13 will be announced on Tuesday, April 17, 2012.