What changed
Previously exempted CBLO liabilities are now included in NDTL for CRR maintenance from the fortnight starting November 21, 2009. The base for this change is the reporting Friday of November 6, 2009. Only three categories remain exempt: inter-bank liabilities, ACU dollar credit balances, and OBU demand/time liabilities.
What it means for you
Banks will need to hold additional CRR on CBLO-related liabilities, increasing their reserve requirements and potentially reducing lendable funds. This aligns with RBI's monetary tightening stance in the Second Quarter Review of 2009-10. Banks should review their CBLO exposure and adjust liquidity planning accordingly.
What you must do
- Include CBLO transaction liabilities in NDTL for CRR computation from Nov 21, 2009 fortnight
- Use the reporting Friday of Nov 6, 2009 as base for the first affected fortnight
- Update internal systems to exclude only the three specified exempt categories from NDTL
- Review liquidity buffers to accommodate higher CRR requirements
Who it affects
All scheduled commercial banks (excluding RRBs), Treasury and ALM teams, Compliance departments
Which liabilities are now exempt from CRR?
Only three categories: liabilities to the banking system under Section 42(1)(d), credit balances in ACU (US$) accounts, and demand/time liabilities of Offshore Banking Units.
When does this change take effect?
From the fortnight beginning November 21, 2009. The base NDTL for that fortnight uses the reporting Friday of November 6, 2009.