What changed
RBI issued a Master Circular that consolidates all currently operative instructions on CRR and SLR for PCBs up to June 30, 2009. This replaces earlier piecemeal circulars with a single reference document. The circular does not introduce new requirements but compiles existing ones for ease of compliance.
What it means for you
For urban co-operative banks, this Master Circular serves as the single source of truth for all CRR and SLR compliance requirements. Banks must ensure their internal processes align with the consolidated guidelines, particularly on daily maintenance of statutory reserves and reporting. The circular reinforces the need for robust liquidity monitoring and timely submission of returns to avoid penalties.
What you must do
- Review the Master Circular and update your bank's internal compliance manuals to reflect the consolidated CRR and SLR instructions.
- Ensure the daily register of cash reserve and liquid assets (Annex 8 format) is maintained and reviewed by the CEO every business day.
- Verify that your NDTL computation for CRR and SLR follows the prescribed methodology, including exemptions and borrowings from abroad.
- Train relevant staff on the reporting requirements and penalty provisions for non-submission or delayed submission of returns.
- Confirm that your bank's SLR holdings meet the minimum requirement in government securities as specified in the circular.
Who it affects
All Primary (Urban) Co-operative Banks (scheduled and non-scheduled), Chief Executive Officers of PCBs, Compliance and treasury departments of PCBs, Regional Offices of RBI's Department of Banking Supervision
Does this Master Circular introduce any new CRR or SLR rates for PCBs?
No, this circular does not introduce new rates. It consolidates all existing instructions on CRR and SLR that were operational as of June 30, 2009, into a single document for ease of reference.
What are the key compliance requirements for PCBs under this circular?
PCBs must maintain a daily register of cash reserve and liquid assets (Annex 8 format), ensure CEO oversight of daily statutory liquidity compliance, and follow prescribed NDTL computation and reporting procedures. Penalties apply for non-submission or delayed returns.
Which sections of law govern CRR and SLR for scheduled vs non-scheduled PCBs?
For scheduled PCBs, CRR is governed by Section 42(1) of the RBI Act, 1934. For non-scheduled PCBs, CRR falls under Section 18 of the Banking Regulation Act, 1949 (AACS). SLR for all PCBs is governed by Section 24 of the same Act.