What changed
The Banking Regulation (Amendment) Act, 2007, effective January 23, 2007, replaced the earlier ordinance. RBI issued a notification on February 14, 2008, confirming that RRBs must continue to maintain a 25% SLR on total net demand and time liabilities, in partial modification of the 1997 circular.
What it means for you
RRBs must hold at least 25% of their net demand and time liabilities in specified assets like cash, gold, or unencumbered SLR securities. This ensures liquidity and compliance with statutory requirements, impacting their investment and lending strategies.
What you must do
- Calculate SLR at 25% of total net demand and time liabilities as on the last Friday of the second preceding fortnight.
- Maintain eligible assets including cash, gold, and unencumbered SLR securities as per the specified list.
- Include excess CRR balances with RBI and net current account balances with other scheduled commercial banks as deemed cash.
- Ensure unencumbered investments are not drawn against or availed for credit arrangements.
Who it affects
All Regional Rural Banks, RBI's Rural Planning and Credit Department
What is the SLR requirement for RRBs under this notification?
RRBs must maintain a uniform SLR of 25% on their total net demand and time liabilities, valued as per RBI's method.
Which assets qualify for SLR maintenance?
Qualifying assets include cash, gold (at current market price), and unencumbered investments in dated securities, Treasury Bills, and other notified SLR securities.
Can excess CRR balances be counted towards SLR?
Yes, any balances maintained with RBI in excess of the CRR requirement under Section 42 of the RBI Act, 1934, are deemed as cash for SLR purposes.