In an attempt to absorb some of the surplus liquidity available in the banking system, the Reserve Bank of India (RBI) on Saturday asked banks to maintain an incremental cash reserve ratio (CRR) of 100%, effective the fortnight ended November 26, reports fe Bureau in Mumbai. The move is estimated to suck out around Rs 3.24 lakh crore excess liquidity from the system and will be applicable on deposits between September 16 and November 11 fortnights. RBI said the incremental CRR is intended to be a temporary measure within its liquidity management framework to drain excess liquidity in the system and shall be reviewed on December 9 or even earlier. As per RBI data, total deposits rose from Rs 97 lakh core in the September 16 fortnight to Rs 101.1 lakh crore in the November 11 fortnight. The central bank said the CRR remains unchanged at 4% of NDTL. “With the withdrawal of the legal tender status of Rs 500 and Rs 1,000 denomination bank notes beginning November 9, there has been a surge in deposits relative to the expansion in bank credit, leading to large excess liquidity in the system,” it said, adding that the magnitude of surplus liquidity available with the banking system is expected to increase further in the fortnights ahead. Banks have already parked a record Rs 4.3 lakh crore with RBI in return of bonds as of November 22. “This is intended to absorb a part of the surplus liquidity arising from the return of specified bank notes to the banking system, while leaving adequate liquidity with banks to meet the credit needs of the productive sectors of the economy,” RBI said. Part of RBI’s liquidity management tools, CRR ensures that banks do not run out of cash when depositors demand money and it is also used by the central bank to check inflation.