What changed
RBI clarified that IDBI Bank Limited is not among the banks (State Bank of India, a subsidiary bank, and a corresponding new bank) whose current account balances are treated as cash for CRR/SLR under Sections 18(1)(c) and 24(2)(a) of the B.R. Act, 1949 (AACS). UCBs that had been including such balances in their CRR/SLR calculations must now exclude them and report the position as on June 30, 2008.
What it means for you
UCBs will need to adjust their CRR/SLR compliance calculations by removing current account balances with IDBI Bank from eligible cash. This may increase the amount of other liquid assets required to meet statutory ratios. Banks must report the position as of June 30, 2008 to their respective RBI Regional Offices using the prescribed format.
What you must do
- If your UCB maintains current account balances with IDBI Bank Limited and currently reports them under CRR/SLR, identify the position as on June 30, 2008.
- Exclude these balances from CRR/SLR calculations under Sections 18(1)(c) and 24(2)(a) of the B.R. Act, 1949 (AACS).
- Submit the required data in the annexed format to your respective RBI Regional Office.
- Update internal systems and reporting templates to ensure ongoing compliance.
Who it affects
All Primary (Urban) Co-operative Banks, UCBs maintaining current accounts with IDBI Bank Limited and currently reporting them under CRR/SLR
Why can't IDBI Bank balances be counted for CRR/SLR?
Under Sections 18(1)(c) and 24(2)(a) of the B.R. Act, 1949 (AACS), only net balances maintained in current accounts with State Bank of India, a subsidiary bank, and a corresponding new bank are treated as cash for CRR/SLR. IDBI Bank is not included in that list.
What should UCBs do if they have already reported these balances?
UCBs that maintain current account balances with IDBI Bank Limited and presently report them under CRR/SLR must intimate the actual position as on June 30, 2008 to their respective RBI Regional Office using the annexed format, and adjust future CRR/SLR filings accordingly.
Does this circular affect other types of cooperative banks?
The circular is addressed to Chief Executive Officers of All Primary (Urban) Co-operative Banks. Other cooperative banks should check their specific regulatory guidelines.