Banking system liquidity, currently at a daily surplus of Rs 3 lakh crore, is set for a festive-season boost as the first of the stage-gated reductions in the cash reserve ratio (CRR) takes effect on Saturday. This phase of the CRR cut is expected to inject about Rs 62,000 crore into the banking system two weeks before the festive season begins, coinciding also with the most significant reductions in the uniform producer levy since it was introduced eight years ago. Higher liquidity is expected to better facilitate transmission of the central bank's earlier policy rate cuts, bankers and economists said. The CRR cut would facilitate further monetary transmission and stimulate economic activity, central bank governor Sanjay Malhotra had said in August.