Home › Circulars › RBI/2008-2009/346

CRR cut for Urban Co-op Banks by 50 bps to 5%

Current · Source: Reserve Bank of India · RBI/2008-2009/346 · issued 05 Jan 2009 · ~1 min read
Quick answerRBI reduced CRR for Scheduled Primary (Urban) Co-operative Banks by 50 basis points from 5.50% to 5.00% of NDTL, effective fortnight starting January 17, 2009, to ease liquidity amid global and domestic macroeconomic conditions.
The rule, in the simplest words
How it plays out — a real example

Rahul, a co-operative bank branch officer in Indore, was happy to hear that the CRR had been reduced. This meant that his bank had more money to lend to people who wanted to buy gold, which would help the local economy. He updated the bank's calculations and adjusted the liquidity buffers to ensure they were ready for the change.

What changed

The Cash Reserve Ratio for Scheduled Primary (Urban) Co-operative Banks was reduced by 50 basis points, from 5.50% to 5.00% of net demand and time liabilities. This change takes effect from the fortnight beginning January 17, 2009, as per the notification dated January 5, 2009.

What it means for you

Urban co-operative banks will have to maintain lower reserves with RBI, freeing up funds for lending or other deployment. This move is aimed at injecting liquidity into the system to support economic activity during a period of global and domestic macroeconomic stress.

What you must do

Who it affects

All Scheduled Primary (Urban) Co-operative Banks, Treasury and compliance teams of these banks, Borrowers and depositors of urban co-operative banks (indirectly through liquidity impact)

❓ Common questions

What is the effective date for this CRR reduction?

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

Does this CRR cut apply to all co-operative banks?

No, it applies only to Scheduled Primary (Urban) Co-operative Banks, not to other categories of co-operative banks.

Why did RBI reduce the CRR for urban co-operative banks?

RBI cited a review of the current global and domestic macroeconomic situation as the reason, aiming to ease liquidity conditions.

📜 Read the original circular — full text as issued by RBI
RBI/2008-2009/346 Ref: UBD (PCB).No./ 9 /12.03.000/2008-09 January 05, 2009 The Chief Executive Officers of All Scheduled Primary (Urban) Co-operative Banks Dear Sir, Section 42(1) of Reserve Bank of India Act, 1934- Maintenance of Cash Reserve Ratio (CRR) Please refer to our Circular UBD (PCB) Cir. No.8/ 12.03.000/ 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 Primary (Urban) Co-operative 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 UBD (PCB) No/ /12.03.000/2008-09 dated January 05, 2009 is enclosed. 4. Please acknowledge receipt. Yours faithfully, (A.K.Khound) Chief General Manager in Charge UBD(PCB)No/ 12 /12.03.000/2008-09 January 05, 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 UBD(PCB)No./7/12.03.000/2008-09 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 Primary (Urban) Co-operative 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. (V. S. Das) Executive Director
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-2009/346 · issued 05 Jan 2009. The plain-English explanation above is BankPulse’s own independent summary.
🧰 Tools — save, print, templates & related
Most relevant forTreasury Team / ALMCompliance TeamSenior Management / BoardRisk ManagementInternal AuditData Science / Analytics
🛠 Banker’s toolkit — checklists & reply templates →
Related circulars · Department of Regulation
SFB Pillar 3 Disclosure Norms Aligned with BaselUCB Deposit Rate Disclosure & Uniformity Rules UpdatedLAB Deposit Rate Disclosure & Uniformity Rules TightenedPayments Banks: Interest Rates Must Match Disclosed ScheduleRBI Updates Bulk Deposit Rate Rules and Disclosure Timing
Browse all departments →
Who does what — compliance checklist
💻 IT / Systems
  • Communicate the change to relevant departments and update internal systems for CRR reporting.
📜 Compliance
  • Update your CRR maintenance calculations to reflect the new 5.00% rate from the fortnight starting January 17, 2009.
  • Ensure your treasury and compliance teams adjust liquidity buffers accordingly to avoid any shortfall.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All Scheduled Primary (Urban) Co-operative Banks, Treasury and compliance teams of these banks, Borrowers and depositors of urban co-operative banks (indirectly through liquidity impact)), your first concrete step on “CRR cut for Urban Co-op Banks by 50 bps to 5%” is: “Update your CRR maintenance calculations to reflect the new 5.00% rate from the fortnight starting January 17, 2009.” (RBI issued this 05 Jan 2009).

  1. Circular: RBI/2008-2009/346 -- CRR cut for Urban Co-op Banks by 50 bps to 5%
  2. Issued: 05 Jan 2009
  3. Action required: Update your CRR maintenance calculations to reflect the new 5.00% rate from the fortnight starting January 17, 2009.
  4. Action required: Ensure your treasury and compliance teams adjust liquidity buffers accordingly to avoid any shortfall.
  5. Action required: Communicate the change to relevant departments and update internal systems for CRR reporting.
  6. Owner: ____________ Target date: ____________
  7. Board/committee approval needed? Y / N
  8. 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.

💬 Banker Discussion

Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.

Loading comments…
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4744&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.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
—