Home › Circulars › RBI/2008-09/339

CRR Cut by 50 bps to 5.00% Effective Jan 17, 2009

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2008-09/339 · issued 02 Jan 2009 · ~1 min read
Quick answerRBI reduced CRR by 50 bps from 5.50% to 5.00% of NDTL, effective fortnight starting January 17, 2009. This frees up liquidity for scheduled commercial banks (excluding RRBs) amid global and domestic macroeconomic stress.

What changed

The Cash Reserve Ratio (CRR) for scheduled commercial banks was reduced by 50 basis points from 5.50% to 5.00% of net demand and time liabilities (NDTL). The change takes effect from the fortnight beginning January 17, 2009, as per the notification dated January 2, 2009.

What it means for you

Banks will need to hold less cash with RBI, releasing funds for lending or investment. This move aims to ease liquidity conditions in response to the global financial crisis and domestic slowdown. Lower CRR supports credit flow and reduces pressure on bank margins.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

All scheduled commercial banks (excluding Regional Rural Banks), Treasury departments managing CRR compliance, Lending and credit teams expecting improved liquidity

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

When does the new CRR rate become effective?

The reduced CRR of 5.00% applies from the fortnight beginning January 17, 2009.

Which banks are covered by this circular?

All scheduled commercial banks except Regional Rural Banks (RRBs) are required to comply.

What was the previous CRR rate before this cut?

The CRR was 5.50% of NDTL, as per the earlier circular dated November 3, 2008.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2000: DBOD.No.Ret.BC.102/12.01.001/2008-2009 — "Notification on Maintenance of CRR" dated January 2, 2009”
📜 Read the original circular — full text as issued by RBI
RBI/2008-09/339 Ref: DBOD.No.Ret.BC.103 /12.01.001/2008-09 January 02, 2009 All Scheduled Commercial Banks (excluding Regional Rural Banks) Dear Sir, Section 42(1) of the Reserve Bank of India Act, 1934 - Maintenance of CRR Please refer to our Circular  DBOD. No. Ret. BC.71 /12.01.001/ 2008-09 dated November 03, 2008  on the captioned subject. 2. On a review of the current global and domestic macroeconomic situation, and as set out in the Reserve Bank's  Press Release 2008-2009/1023 dated January 02, 2009 , it has been decided to reduce the Cash Reserve Ratio (CRR) for Scheduled Commercial Banks by 50 basis points from 5.50 per cent to 5.00 per cent of their net demand and time liabilities (NDTL), effective from the fortnight beginning January 17, 2009. 3. A copy of the relative notification  DBOD. No. Ret. BC.102 /12.01.001/2008-2009 dated January 02, 2009  is enclosed. 4. Please acknowledge receipt. Yours faithfully (P. K. Mahapatra) General Manager DBOD.No.Ret.BC. 102 /12.01.001/2008-2009 January 2, 2009 NOTIFICATION In exercise of the powers conferred under the sub-section (1) of Section 42 of the Reserve Bank of India Act, 1934 and in partial modification of the earlier notification  DBOD.No.Ret.BC.70/12.01.001/2008-09 dated November 03, 2008 , the Reserve Bank of India hereby notifies that the average Cash Reserve Ratio (CRR) required to be maintained by every Scheduled Commercial Bank shall stand reduced by 50 basis points to 5.00 per cent of its net demand and time liabilities, from the fortnight beginning January 17, 2009. (Anand Sinha) Executive Director
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/339 · issued 02 Jan 2009. The plain-English explanation above is BankPulse’s own independent summary.
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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4742&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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