What changed
The CRR for RRBs was lowered by 50 basis points, from 9.00% to 8.50% of net demand and time liabilities, effective from the fortnight beginning October 11, 2008. This was a temporary, ad hoc move prompted by a review of liquidity conditions following global and domestic developments.
What it means for you
RRBs will have to maintain lower statutory reserves, freeing up funds for lending or investment. This provides immediate liquidity relief to these banks, helping them manage tighter conditions. The temporary nature signals RBI's readiness to adjust based on evolving liquidity.
What you must do
- Recalculate CRR maintenance for the fortnight starting October 11, 2008 using the new 8.50% rate on NDTL.
- Monitor RBI press releases and circulars for further changes, as this measure is ad hoc and subject to review.
- Ensure acknowledgment of this circular is sent to the respective RBI Regional Office.
- Update internal systems and reporting templates to reflect the revised CRR requirement.
Who it affects
All Regional Rural Banks (RRBs), RBI's Rural Planning and Credit Department (RPCD)
What is the effective date for the CRR reduction?
The reduced CRR of 8.50% applies from the fortnight beginning October 11, 2008.
Is this CRR cut permanent?
No, it is described as ad hoc and temporary, subject to continuous review based on liquidity conditions.
Which previous circular does this modify?
This notification partially modifies the earlier circular RPCD.CO.RRB.No.1301/03.05.28(B)/2008-2009 dated July 31, 2008.