What changed
The Banking Regulation (Amendment) Act, 2007 replaced the earlier ordinance and came into effect on January 23, 2007. Under the amended Section 24, RBI issued a notification specifying that scheduled commercial banks shall continue to maintain a uniform SLR of 25% on their total net demand and time liabilities. The eligible assets for SLR include cash, gold, and unencumbered investments in specified dated securities, Treasury Bills, and future government securities with SLR status.
What it means for you
Banks must ensure their SLR holdings remain at least 25% of net demand and time liabilities, using the valuation method prescribed by RBI. The circular clarifies that deposits with RBI under Section 11(2) for foreign banks, excess CRR balances, and net current account balances with other scheduled banks count as cash for SLR purposes. This maintains the existing requirement under the updated legal framework.
What you must do
- Verify that your bank's SLR holdings are at least 25% of net demand and time liabilities as on the last Friday of the second preceding fortnight.
- Ensure eligible assets include cash, gold (valued at current market price), and unencumbered investments in specified dated securities, Treasury Bills, and future government securities with SLR status.
- Treat deposits with RBI under Section 11(2) (for foreign banks), excess CRR balances, and net current account balances with other scheduled banks as cash for SLR computation.
- Review the enclosed notification for the complete list of SLR securities and valuation methods.
Who it affects
All scheduled commercial banks (excluding Regional Rural Banks), Treasury and ALM departments, Compliance and regulatory reporting teams
What is the SLR percentage required under this circular?
All scheduled commercial banks must maintain a uniform SLR of 25% on their total net demand and time liabilities.
Which assets qualify for SLR maintenance?
Eligible assets include cash, gold (valued at current market price), and unencumbered investments in specified dated securities, Treasury Bills, and future government securities with SLR status as notified by RBI.
Does this circular change the existing SLR requirement?
No, it confirms the continuation of the 25% SLR requirement under the amended Banking Regulation Act, 2007, effective from January 23, 2007.