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UCB Balances with IDBI Bank: CRR/SLR Exemption

Current · Source: Reserve Bank of India · RBI/2008-09/364 · issued 29 Jan 2009 · ~1 min read
Quick answerRBI exempts Primary Urban Co-operative Banks from maintaining CRR/SLR on current account balances held with IDBI Bank Limited, effective from December 15, 2008, until further order.
The rule, in the simplest words
How it plays out — a real example

Mr. Kumar's customers deposit money in their current accounts with IDBI Bank, which is then used to give more gold loans to other customers. With the exemption, Mr. Kumar can now use these funds more efficiently, increasing the number of loans he can give and helping the local economy grow. A treasury officer in Indore, Mr. Kumar, is happy to see the exemption from CRR/SLR on current account balances with IDBI Bank. This means he can now use the funds deposited by his customers with IDBI Bank to give more loans, increasing their business and helping the local economy.

What changed

Earlier, UCBs were told that balances in current accounts with IDBI Bank would not count for CRR/SLR purposes. Now, after representations from the sector, RBI has exempted UCBs from maintaining CRR/SLR on amounts deposited with IDBI Bank in current accounts, until further notice.

What it means for you

This exemption reduces the reserve burden for UCBs on funds parked with IDBI Bank, freeing up liquidity. Banks can now treat these balances as not requiring additional CRR/SLR compliance, easing cash flow management. However, the exemption is temporary and subject to review.

What you must do

Who it affects

Primary (Urban) Co-operative Banks, IDBI Bank Limited, RBI Regional Offices

❓ Common questions

Regulatory timeline

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

Does this exemption apply to all types of accounts with IDBI Bank?

No, the exemption is specifically for amounts deposited in current accounts with IDBI Bank Limited, as per the circular.

Is this exemption permanent?

No, it is effective 'till further order', meaning RBI may revoke or modify it in the future.

What was the previous position before this circular?

Earlier, UCBs were advised that current account balances with IDBI Bank would not be eligible for CRR/SLR purposes, as per circular dated July 11, 2008.

📜 Read the original circular — full text as issued by RBI
RBI/2008-09/364 UBD. BPD (PCB) Cir No. 41 /12.05.001/2008-09 January 29, 2009 Chief Executive Officers of All Primary (Urban) Co-operative Banks Dear Sir Balances held by UCBs with IDBI Bank Limited- Treatment for CRR/SLR purpose- Please refer to our circular UBD (PCB). Cir. No.3/12.05.001/2008-09 dated July 11, 2008 on the above subject. 2. In terms of the circular referred to above, UCBs were advised that the balance maintained by them in current account with IDBI Bank Limited would not be eligible for being reckoned as 'net balance in current account' for the purpose of CRR/SLR under Section 18 and 24 of the B.R. Act, 1949 (AACS). 3. In view of the representations received from urban banking sector, the matter was reviewed and it has been decided that primary (urban) co-operative banks, are exempted, till further order, from the obligation of maintenance of cash reserve ratio (CRR) under section 18 or assets in the form of cash, gold or unencumbered approved securities under section 24 read with section 56 of the Banking Regulation Act, 1949, to the extent of the amounts deposited by them with IDBI Bank Limited, in current account. 4. A copy of the notification UBD.PCB.10/16.26.000/05-06 dated December 15, 2008 published in Part III Section 4 of the Gazette of India (Extraordinary) dated January 5, 2009 is enclosed. 5. Please acknowledge receipt to the Regional Office concerned of the Reserve Bank of India.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/364 · issued 29 Jan 2009. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Update internal CRR/SLR calculation systems to exclude current account balances with IDBI Bank from reserve requirements.
📜 Compliance
  • Ensure compliance with the exemption only for amounts deposited in current accounts with IDBI Bank, as specified.
  • Acknowledge receipt of this circular to the respective RBI Regional Office.
  • Monitor for any future changes, as the exemption is valid 'till further order'.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (Primary (Urban) Co-operative Banks, IDBI Bank Limited, RBI Regional Offices), your first concrete step on “UCB Balances with IDBI Bank: CRR/SLR Exemption” is: “Update internal CRR/SLR calculation systems to exclude current account balances with IDBI Bank from reserve requirements.” (RBI issued this 29 Jan 2009).

  1. Circular: RBI/2008-09/364 -- UCB Balances with IDBI Bank: CRR/SLR Exemption
  2. Issued: 29 Jan 2009
  3. Action required: Update internal CRR/SLR calculation systems to exclude current account balances with IDBI Bank from reserve requirements.
  4. Action required: Ensure compliance with the exemption only for amounts deposited in current accounts with IDBI Bank, as specified.
  5. Action required: Acknowledge receipt of this circular to the respective RBI Regional Office.
  6. Action required: Monitor for any future changes, as the exemption is valid 'till further order'.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4807&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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