What changed
This master circular consolidates and updates all prior instructions on CRR and SLR issued up to September 18, 2009, replacing the earlier master circular of October 11, 2006. It reiterates the CRR rate of 5% effective from the fortnight beginning January 17, 2009, and outlines the incremental CRR provisions under Section 42(1-A) of the RBI Act.
What it means for you
Banks must ensure compliance with the updated CRR and SLR requirements as per this consolidated circular, which serves as a single reference document. The circular clarifies that no interest is paid on CRR balances maintained with RBI, and penalties apply for non-compliance. It also mandates statutory auditor certification of DTL computations for SLR.
What you must do
- Review and update internal CRR and SLR computation processes to align with this master circular.
- Ensure daily maintenance of CRR at 5% of net demand and time liabilities, adjusted for exemptions.
- Submit Form A (CRR) and Form VIII (SLR) returns to RBI as prescribed.
- Obtain statutory auditor certification for correctness of demand and time liability computations for SLR.
- Monitor incremental CRR requirements if DTL exceeds specified thresholds.
Who it affects
All scheduled commercial banks (excluding Regional Rural Banks), Treasury and compliance departments of banks, Statutory auditors of banks
What is the CRR rate as per this master circular?
The CRR is prescribed at 5.00% of a bank's total demand and time liabilities, effective from the fortnight beginning January 17, 2009, with no floor or ceiling rate.
Are Regional Rural Banks covered under this circular?
No, this master circular applies to all scheduled commercial banks excluding Regional Rural Banks.
What returns are required for CRR and SLR compliance?
Banks must submit Form A return for CRR under Section 42(2) of the RBI Act, 1934, and Form VIII return for SLR under Section 24 of the Banking Regulation Act, 1949.