CRR Exemption on Select Liabilities from April 2007
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2006-2007/332 · issued 01 Mar 2007 · ~2 min read
Quick answerFrom April 1, 2007, scheduled commercial banks no longer need to maintain CRR on liabilities to the banking system, ACU (US$) credit balances, CBLO transactions with CCIL, and OBU demand/time liabilities. The statutory minimum CRR of 3% has been removed.
What changed
The RBI notified that the statutory minimum CRR requirement of 3% of total demand and time liabilities ceased to exist from April 1, 2007, following the enforcement of Section 3 of the RBI (Amendment) Act, 2006. Consequently, the earlier circular of March 1, 2007 was modified to exempt four specific liability categories from average CRR maintenance effective April 1, 2007.
What it means for you
Banks can now free up funds that were earlier locked as CRR on interbank liabilities, ACU balances, CBLO transactions, and OBU deposits. This reduces the cost of funds for these categories and improves liquidity management flexibility. The removal of the 3% statutory floor also gives RBI more leeway to set CRR based on monetary policy needs.
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
Update your CRR computation system to exclude the four exempted liability categories from April 1, 2007.
Ensure that CRR reporting to RBI reflects the revised basis as per the notification.
Review your liquidity planning to account for the freed-up reserves from these exemptions.
Communicate the change to your treasury and compliance teams for accurate implementation.
Who it affects
All scheduled commercial banks (excluding RRBs), Treasury departments managing CRR compliance, Offshore Banking Units (OBUs) of Indian banks
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn05 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Which liabilities are now exempt from CRR maintenance?
Four categories: (i) liabilities to the banking system in India, (ii) credit balances in ACU (US$) accounts, (iii) transactions in CBLO with CCIL, and (iv) demand and time liabilities of Offshore Banking Units.
Does this mean the CRR requirement is completely removed?
No. Only the statutory minimum of 3% is gone, and the four specific categories are exempt. Banks still need to maintain CRR on other demand and time liabilities as per RBI's prevailing CRR rate.
From when is this exemption effective?
The exemption is effective from April 1, 2007, as per the notification dated April 20, 2007.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2465: DBOD.No.Ret.BC.84/12.01.001/2006-07 — "Maintenance of Cash Reserve Ratio (CRR) on Exempted Categories" dated April 20, 2007”
📜 Read the original circular — full text as issued by RBI
RBI/2006-2007/332
Ref: DBOD.No. Ret.BC.84 /12.01.001/2006-07
April 20 , 2007
All Scheduled Commercial Banks
(excluding Regional Rural Banks)
Dear Sir,
Maintenance of Cash Reserve Ratio (CRR) on Exempted Categories
Please refer to our Circular RBI/2006-2007/270 DBOD.No.Ret.BC.64/12.01.001/2006-07 dated March 01, 2007 on the captioned subject. Consequent upon the notification of Section 3 of the Reserve Bank of India (Amendment) Act, 2006 as coming into force with effect from April 01,2007, the statutory minimum CRR requirement of 3 per cent of total demand and time liabilities no longer exists. It has been decided to modify the above circular accordingly, with effect from April 01, 2007. Therefore, every Scheduled Commercial Bank shall be exempted from maintaining average CRR with effect from April 01, 2007 on the following liabilities as computed under section 42 (1) of the Reserve Bank of India Act, 1934.
(i) Liabilities to the banking system in India as computed under Clause (d) of the Explanation to Section 42 (1) of the RBI Act, 1934;
(ii) Credit balances in ACU (US$) Accounts;
(iii) Transactions in Collateralized Borrowing and Lending Obligation (CBLO) with Clearing Corporation of India. (CCIL); and
(iv) Demand and Time Liabilities in respect of their Offshore Banking Units (OBUs)
2.A copy of the relative notification DBOD. No. Ret. BC. 85 /12.01.001/2006-2007 dated April 20, 2007 is enclosed.
Please acknowledge receipt.
Yours faithfully
(Malvika Sinha)
General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/332 · issued 01 Mar 2007. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3430&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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