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
- Update internal CRR/SLR calculation systems to exclude current account balances with IDBI Bank from reserve requirements.
- 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'.
Who it affects
Primary (Urban) Co-operative Banks, IDBI Bank Limited, RBI Regional Offices
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.