What changed
RBI has exempted StCBs and DCCBs from CRR under Section 18 and SLR under Section 24 of the Banking Regulation Act, 1949, for balances held in current accounts with IDBI Bank. This exemption is effective until further notice, superseding earlier requirements.
What it means for you
Co-operative banks can now park funds with IDBI Bank without needing to set aside additional reserves for those deposits, improving liquidity management. This reduces the compliance burden and frees up funds for lending or other operations, though the exemption is temporary and subject to review.
What you must do
- Update internal CRR/SLR computation systems to exclude IDBI current account balances from reserve requirements.
- Inform treasury and compliance teams about the exemption and its indefinite validity.
- Monitor RBI notifications for any future changes to this exemption.
- Ensure accurate reporting of balances to avoid penalties during inspections.
Who it affects
State Co-operative Banks (StCBs), Central Co-operative Banks (DCCBs), IDBI Bank Limited
Does this exemption apply to all deposits with IDBI Bank?
No, it applies only to amounts deposited in current accounts with IDBI Bank, not to other types of accounts or deposits.
Is this exemption permanent?
No, it is valid 'till further order,' meaning RBI may revoke or modify it in the future.