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CRR Exemption for StCBs on Interbank and CBLO Liabilities

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2006-2007/277 · issued 02 Mar 2007 · ~1 min read
Quick answerRBI withdrew its June 2006 circular but kept the CRR exemption for Scheduled State Co-operative Banks on interbank liabilities and CBLO transactions, subject to a 3% statutory minimum CRR on total demand and time liabilities.

What changed

RBI withdrew its earlier circular of June 22, 2006 on CRR exemptions for StCBs. However, the substantive exemption remains unchanged: StCBs continue to be exempt from maintaining average CRR on liabilities to the banking system and CBLO transactions, provided they maintain the statutory minimum CRR of 3% on total demand and time liabilities.

What it means for you

Scheduled State Co-operative Banks can continue to exclude interbank liabilities and CBLO borrowings from average CRR calculations, reducing their reserve costs. This supports liquidity management for StCBs while ensuring they still meet the mandatory 3% floor on overall liabilities.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

Scheduled State Co-operative Banks, RBI regional offices overseeing StCBs

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Does this circular change the CRR exemption for StCBs?

No, the exemption remains the same as before. RBI only withdrew the earlier circular but reissued the same exemption conditions.

What liabilities are exempt from average CRR for StCBs?

Liabilities to the banking system (as defined under Section 42(1) of the RBI Act) and transactions in CBLO with CCIL are exempt, subject to maintaining 3% statutory minimum CRR on total liabilities.

What is the effective date of this exemption?

The exemption is effective from June 22, 2006, as stated in the circular.

📜 This document’s life story (2 recorded events, each backed by RBI’s own words)
Partially modified by CRR Exemption for Scheduled State Co-operative Banks
RBI’s words: “It has been decided to modify the above circular accordingly”
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2500: RPCD.RF.BC.56/07.02.01/2006-07 — "Maintenance of Cash Reserve Ratio (CRR) on Exempted Categories" dated March 2, 2007”
📜 Read the original circular — full text as issued by RBI
RBI/2006-2007/277 RPCD.RF.BC.56/07.02.01/2006-07 March 02, 2007 All Scheduled State Co-operative Banks Dear Sir, Maintenance of Cash Reserve Ratio (CRR) on Exempted Categories Please refer to our Circular RBI/2005-2006/425 RPCD.RF.BC.94/07.02.01/2005-06 dated June 22, 2006 on the captioned subject. It has been decided to withdraw the above circular with immediate effect. It has, however, been decided that every Scheduled State Co-operative Bank shall continue to be exempted from maintaining average CRR with effect from June 22, 2006 on the following liabilities, subject to the maintenance of statutory minimum CRR of 3 per cent on its total demand and time liabilities: (i) Liabilities to the banking system in India as computed under Clause (e) of the Explanation to Section 42 (1) of the RBI Act, 1934; and (ii) Transactions in Collateralized Borrowing and Lending Obligation (CBLO) with Clearing Corporation of India. (CCIL). 2. A copy of the relative notification RPCD.RF.BC.55/07.02.01/2006-07 dated March 02, 2007 is enclosed. 3. Please acknowledge receipt to our Regional Office concerned. Yours faithfully (K.Bhattacharya) General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/277 · issued 02 Mar 2007. The plain-English explanation above is BankPulse’s own independent summary.
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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3313&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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