CRR hiked 50 bps to 7% for Urban Co-op Banks from Aug 4, 2007
Current · Source: Reserve Bank of India · RBI/2007-2008/110 · issued 31 Jul 2007 · ~1 min read
Quick answerRBI raised CRR for Scheduled Primary Urban Co-operative Banks by 50 bps to 7.00%, effective fortnight beginning August 4, 2007, citing current liquidity conditions. This tightens funds available for lending.
The rule, in the simplest words
From August 4, 2007, urban co-operative banks must keep 7% of all the money people have deposited with them (demand and time liabilities) as cash with RBI (Cash Reserve Ratio).
This is a 0.50% increase from the old rate, meaning banks have to set aside more money and cannot lend that extra portion.
The rule applies to every scheduled primary urban co-operative bank, and they must follow it starting the fortnight that begins August 4, 2007.
Banks need to recalculate their reserves and tell RBI they got this message (acknowledge receipt).
How it plays out — a real example
A co-operative bank branch officer in Indore, Priya, checks the new circular and sees her bank must now keep 7% of all customer deposits as cash with RBI instead of the old 6.5%. She tells her treasury team to recalculate the reserve amount for the fortnight starting August 4, so they don't fall short and face penalties.
What changed
The Cash Reserve Ratio (CRR) for Scheduled Primary (Urban) Co-operative Banks was increased by 50 basis points from the previous level to 7.00%. The new rate applies from the fortnight starting August 4, 2007, superseding the earlier notification of April 24, 2007.
What it means for you
Urban co-operative banks must now set aside a higher proportion of their demand and time liabilities as reserves with RBI, reducing lendable resources. This move aims to absorb excess liquidity and manage inflationary pressures, impacting net interest margins for these banks.
What you must do
Recalculate CRR maintenance for the fortnight beginning August 4, 2007, at 7.00% of total demand and time liabilities.
Ensure compliance with the revised CRR and acknowledge receipt of the circular to RBI.
Review liquidity buffers and adjust lending or investment strategies to accommodate the higher reserve requirement.
Who it affects
Scheduled Primary (Urban) Co-operative Banks, Treasury and ALM teams of urban co-operative banks, RBI's Department of Banking Supervision (urban co-op banks)
❓ Common questions
What is the new CRR rate for urban co-operative banks?
The CRR has been increased to 7.00% of total demand and time liabilities, effective from the fortnight beginning August 4, 2007.
Why did RBI increase the CRR?
RBI cited a review of the current liquidity situation as the reason for the 50 bps hike, indicating a need to tighten monetary conditions.
Does this circular apply to all urban co-operative banks?
It applies specifically to Scheduled Primary (Urban) Co-operative Banks, as defined under Section 42(1) of the RBI Act, 1934.
📜 Read the original circular — full text as issued by RBI
RBI/2007-2008/110
Ref: UBD (PCB).No. / 9/12.03.000/2007-08
July 31, 2007
To
The Chief Executive Officers of
All Scheduled Primary (Urban) Co-operative Banks
Dear Sir,
Section 42(1) of Reserve Bank of India Act, 1934-
Maintenance of Cash Reserve Ratio (CRR)
Please refer to our Circular RBI/2006-07/348 UBD (PCB) Cir. No/7./12.03.000/2006-07 dated April 25, 2007 on the captioned subject. On a review of the current liquidity situation, it has been decided to increase cash reserve ratio (CRR) of Scheduled Primary (Urban) Co-operative Banks by 50 basis points to 7.00 per cent with effect from the fortnight beginning August 4, 2007.
2. A copy of the relevant notification UBD (PCB) No./9/12.03.000/2007-08 dated July 31, 2007 is enclosed.
3. Please acknowledge receipt.
Yours faithfully,
(N.S VIswanathan)
Chief General Manager in-Charge
UBD(PCB) No./9/12.03.000/2007-08
July 31, 2007
NOTIFICATION
In exercise of the powers conferred under sub-section (1) of Section 42 of the Reserve Bank of India Act, 1934 and in partial modification of the notification UBD.PCB.7/12.03.000/2006-07 dated April 24, 2007, the Reserve Bank of India, hereby, notifies that every Scheduled Primary (Urban) Co-operative bank should maintain a Cash Reserve Ratio (CRR) of 7.00 per cent of its total demand and time liabilities subject to the exemptions as envisaged in the notification UBD.PCB.6/12.03.000/2006-07 dated April 24, 2007, from the fortnight beginning August 04, 2007.
(V.S.Das)
Executive Director
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-2008/110 · issued 31 Jul 2007. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (Scheduled Primary (Urban) Co-operative Banks, Treasury and ALM teams of urban co-operative banks, RBI's Department of Banking Supervision (urban co-op banks)), your first concrete step on “CRR hiked 50 bps to 7% for Urban Co-op Banks from Aug 4, 2007” is: “Recalculate CRR maintenance for the fortnight beginning August 4, 2007, at 7.00% of total demand and time liabilities.” (RBI issued this 31 Jul 2007).
Circular: RBI/2007-2008/110 -- CRR hiked 50 bps to 7% for Urban Co-op Banks from Aug 4, 2007
Issued: 31 Jul 2007
Action required: Recalculate CRR maintenance for the fortnight beginning August 4, 2007, at 7.00% of total demand and time liabilities.
Action required: Ensure compliance with the revised CRR and acknowledge receipt of the circular to RBI.
Action required: Review liquidity buffers and adjust lending or investment strategies to accommodate the higher reserve requirement.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=3752&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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