What changed
The Statutory Liquidity Ratio (SLR) for Regional Rural Banks was reduced from 25% to 24% of their net demand and time liabilities (NDTL). This change takes effect from the fortnight beginning November 8, 2008, as per the notification dated November 3, 2008.
What it means for you
RRBs now need to hold 1% less in prescribed liquid assets against their deposits, freeing up funds for lending or other deployment. This move was prompted by a review of macroeconomic and liquidity conditions in global and domestic markets, aiming to support credit flow and ease pressure on RRBs.
What you must do
- Update SLR maintenance calculations to 24% of NDTL from the fortnight starting November 8, 2008.
- Ensure compliance with the revised SLR requirement at close of business each day.
- Acknowledge receipt of this circular to your respective RBI Regional Office.
Who it affects
All Regional Rural Banks (RRBs), RBI Regional Offices overseeing RRBs
What is the new SLR percentage for RRBs?
The SLR for RRBs has been reduced from 25% to 24% of their net demand and time liabilities (NDTL), effective from the fortnight beginning November 8, 2008.
Why was the SLR reduced for RRBs?
The reduction was based on a review of current and evolving macroeconomic conditions and liquidity in global and domestic financial markets, as outlined in RBI's press release dated November 1, 2008.
When does the new SLR requirement become effective?
The revised SLR of 24% applies from the fortnight starting November 8, 2008.