RRBs Exempted from CRR on Certain Liabilities from April 2007
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2006-2007/341 · issued 24 Apr 2007 · ~2 min read
Quick answerFrom April 1, 2007, RRBs no longer need to maintain CRR on liabilities to the banking system and CBLO transactions with CCIL, following the removal of the statutory 3% minimum CRR floor.
What changed
The Reserve Bank of India (Amendment) Act, 2006 came into force on April 1, 2007, removing the statutory minimum CRR requirement of 3% of total demand and time liabilities. Consequently, RBI modified its earlier circular to exempt RRBs from maintaining average CRR on liabilities to the banking system and CBLO transactions with CCIL, effective from April 1, 2007.
What it means for you
RRBs now have greater flexibility in managing their liquidity as they are not required to set aside reserves for inter-bank liabilities and CBLO transactions. This reduces the cost of funds for RRBs and may encourage more active participation in the CBLO market. Banks should update their CRR computation systems to exclude these exempted categories from the base for reserve maintenance.
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 CRR calculation systems to exclude liabilities to the banking system and CBLO transactions with CCIL from the base for average CRR maintenance.
Ensure compliance with the revised circular from April 1, 2007, and acknowledge receipt to the respective RBI Regional Office.
Review internal liquidity management policies to leverage the reduced reserve requirement for better fund deployment.
Who it affects
All Regional Rural Banks (RRBs) in India, Treasury and compliance departments of RRBs, Clearing Corporation of India (CCIL) for CBLO transactions
❓ Common questions
Regulatory timeline
Stated effective dateeffective from April 1, 2007
Decoded by BankPulse2026-06-19 17:12 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
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 for RRBs?
Liabilities to the banking system in India as computed under Section 42(1) of the RBI Act, and transactions in CBLO with CCIL are exempt from average CRR maintenance from April 1, 2007.
Does this circular remove all CRR requirements for RRBs?
No, it only exempts specific categories—liabilities to the banking system and CBLO transactions. Other demand and time liabilities remain subject to CRR as per prevailing rates.
What triggered this change in CRR exemption?
The notification of Section 3 of the RBI (Amendment) Act, 2006, effective April 1, 2007, removed the statutory minimum CRR of 3%, allowing RBI to modify exemptions for RRBs.
📜 This document’s life story (2 recorded events, 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 #2459: RPCD.RRB.CO.BC.No.72/03.05.28(B)/2006-07 — "Maintenance of Cash Reserve Ratio (CRR) on Exempted Categories" dated April 24, 2007”
RBI’s words: “in partial modification of the notification RPCD.CO.RRB.No 9944 /03.05.28(B) /2006-2007 dated April 24, 2007”
📜 Read the original circular — full text as issued by RBI
RBI/2006-2007/341
RPCD.RRB.CO.BC.No.72/03.05.28(B)/2006-07
April 24, 2007
All Regional Rural Banks
Dear Sir,
Maintenance of Cash Reserve Ratio (CRR) on Exempted Categories
Please refer to our Circular RPCD.CO.RRB.BC.No.52/03.05.28(B)/2006-07 dated March 2, 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 Regional Rural 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 Reserve Bank of India 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.CO.RRB.No.9944/03.05.28(B)/2006-07 dated April 24, 2007 is enclosed.
3. Please acknowledge receipt to our Regional Office concerned.
Yours faithfully
(Surekha Marandi)
General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/341 · issued 24 Apr 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=3454&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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