Reserve Bank has announced the withdrawal of incremental Cash Reserve Ratio – CRR with effect from the fortnight beginning December 10, 2016. RBI had announced an incremental CRR of 100 percent for scheduled banks for the period between September 16, 2016 and November 11, 2016 effective the fortnight beginning November 26, 2016. 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.<br/> <br/>Addressing a press conference post the announcement of 5th Bi-monthly Monetary Policy Statement, RBI Governor clarified that incremental CRR was purely a temporary measure to help RBI in its liquidity management operations. He said incremental CRR is being withdrawn following the government's proactive decision to enhance the ceiling for issue of securities under the Market Stabilisation Scheme – MSS to ? 6,000 billion. A RBI statement further says that the liquidity released by the discontinuation of the incremental CRR would be absorbed by a mix of MSS issuances and liquidity adjustment facility operations.