Better India Central Bank can keep Cash Reserve Ratio as 4% for Banks which has net NPA% less than 0.6% and it will reward good banks which have good cash management

It would be a good idea for India Central Bank to keep Cash Reserve Ratio as 4% for Banks which has net NPA% less than 0.6% and it will reward good banks and banking system will improve further.

Then it will be like encouraging star performers in Software and IT companies.

Purpose of Cash Reserve Ratio is to keep banks more stable and not just to control inflation. 

In Indian banks many banks Net NPA % has reduced drastically.

So instead of keeping CRR as 4.5% for all banks, it is better to have dynamic algorithm that banks which are having net NPA less than 0.6% as just 4%.

At the same time if Net NPA% is more than 1.5%, then for such banks increase CRR from 4.5% to 5%.

Then good banks will be able to give more loans to good companies and then India will prosper.

Then each bank will try to get Net NPA% to below 0.6% in India.

In modern days, it is better to bring dynamic algorithms stated as above rather than static algorithms and static values.