RBI Updates SLR Maintenance Rules for Banks (May 2011)
Current · Source: Reserve Bank of India · RBI/2010-11/516 · issued 09 May 2011 · ~2 min read
Quick answerRBI issued a new notification superseding earlier SLR rules, effective May 9, 2011. Scheduled commercial banks must maintain SLR at 24% of NDTL using cash, gold, or specified securities. MSF borrowing up to 1% of NDTL is now allowed from May 7, 2011.
The rule, in the simplest words
Banks must maintain 24% of their SLR using cash, gold, or specified securities.
SLR securities include dated securities issued up to May 6, 2011, Treasury Bills, and Government of India securities.
Securities acquired under LAF are not eligible for SLR.
Rahul, a treasury officer in Indore, ensures that the bank's SLR assets include gold valued at the current market price, as well as dated securities issued up to May 6, 2011. He also verifies that the bank has not acquired any securities under LAF, as they are not eligible for SLR. On May 7, 2011, Rahul allows the bank to borrow up to 1% of NDTL under the MSF, ensuring that the borrowing does not affect the bank's SLR asset computation.
What changed
RBI replaced the September 2009 SLR notification (partially modified in July 2010) with a new one dated May 9, 2011. The new notification updates the list of eligible SLR securities, including dated securities issued up to May 6, 2011, and clarifies that securities under LAF are not eligible. It also aligns with the introduction of the Marginal Standing Facility (MSF) allowing overnight borrowing up to 1% of NDTL from May 7, 2011.
What it means for you
Banks must ensure their SLR compliance uses the updated list of eligible securities and excludes LAF-acquired securities. The MSF provides an additional liquidity window, but borrowing under it does not count toward SLR assets. The 24% SLR requirement remains unchanged, but the asset composition rules are now clearer and consolidated.
What you must do
Replace old SLR notification references with the new May 9, 2011 notification for compliance.
Ensure SLR assets exclude securities acquired under LAF (including margin).
Update internal systems to include only eligible SLR securities as per the new list (dated securities up to May 6, 2011, T-bills, G-secs, SDLs, etc.).
Note that MSF borrowing up to 1% of NDTL is available from May 7, 2011, but does not affect SLR asset computation.
Review encumbered securities: they cannot be counted for SLR unless not drawn against.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Treasury and ALM departments, Compliance and risk management teams
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the SLR percentage under this notification?
The SLR remains at 24% of net demand and time liabilities (NDTL) as per the earlier circular of December 16, 2010. This notification only updates the list of eligible assets.
Can we use securities acquired under LAF for SLR compliance?
No. Securities (including margin) acquired under the Liquidity Adjustment Facility (LAF) are explicitly excluded from being treated as eligible SLR assets.
Does the MSF borrowing affect our SLR calculation?
No. MSF borrowing up to 1% of NDTL is a separate facility and does not impact SLR asset computation. SLR assets must be maintained independently.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
RBI’s words: “para 2(ii) of the earlier Notification DBOD.No.Ret.BC.91/ 12.02.001/2010-11 dated May 09, 2011, stands modified as under”
📜 Read the original circular — full text as issued by RBI
RBI/2010-11/516
Ref. DBOD No. Ret. BC. 92 /12.02.001/2010-11
May 09, 2011
All Scheduled Commercial Banks
(Excluding Regional Rural Banks)
Dear Sir,
Section 24 of the Banking Regulation Act, 1949- Maintenance of Statutory Liquidity Ratio (SLR)
Please refer to our circular DBOD No.Ret.BC 41 /12.02.001/2009-10 dated September 08,2009 forwarding the Notification DBOD No.Ret.BC 40 /12.02.001/2009-10 dated September 08,2009 and circular DBOD No.Ret.BC 29 /12.02.001/2010-11dated July 27, 2010 forwarding Notification DBOD No.Ret.BC 28 /12.02.001/2010-11dated July 27,2010 on the captioned subject.
2. As announced in the Reserve Bank of India's Annual Monetary Policy Statement 2011-12 on May 03, 2011 Scheduled Commercial Banks (SCBs) may borrow overnight up to one per cent of their respective Net Demand and Time Liabilities (NDTL) under the Marginal Standing Facility (MSF)Scheme effective from the fortnight beginning on May 07, 2011. Operating instructions in this regard are contained in circular FMD No.59/01.18.001/2010-11 dated May 9, 2011 .
3. We have issued a new Notification DBOD No.Ret.BC 91 /12.02.001/2010-11.dated May 09, 2011 superseding the existing Notification Ref.DBOD.No.Ret.BC.40/12.02.001/2009-10 dated September 8, 2009 (which was partially modified by Notification DBOD. No. Ret. BC 28 /12.02.001/2010-11 dated July 27, 2010) on the maintenance of assets for the purpose of computing the Statutory Liquidity Ratio by Scheduled Commercial Banks. A copy of the new Notification referred to above is enclosed.
Yours faithfully,
( P.R. Ravi Mohan )
Chief General Manager
Encl: As above
Ref. DBOD.No.Ret.BC. 91/12.02.001/2010-11
May 9, 2011
NOTIFICATION
In exercise of the powers conferred by sub-section (2A) of Section 24 of Banking Regulation Act, 1949 (10 of 1949) and in partial modification of the Notification Ref.DBOD.No.Ret.BC.40/12.02.001/2009-10 dated September 8, 2009 and Notification DBOD. No. Ret. BC 28 /12.02.001/2010-11 dated July 27, 2010 the Reserve Bank of India hereby specifies that every scheduled commercial bank shall continue to maintain in India assets, as detailed below, the value of which shall not, at the close of business on any day, be less than 24 per cent of the total net demand and time liabilities in India as on the last Friday of the second preceding fortnight as prescribed vide notification DBOD.No.Ret.BC.66/12.02.001/2010-11 dated December 16, 2010 valued in accordance with the method of valuation specified by the Reserve Bank of India from time to time:
(a) Cash or
(b) Gold valued at a price not exceeding the current market price, or
(c) Investment in the following instruments which will be referred to as "Statutory Liquidity Ratio (SLR) securities":
(i) Dated securities issued up to May 6, 2011 as listed in the Annex ;
(ii) Treasury Bills of the Government of India;
(iii) Dated securities of the Government of India issued from time to time under the market borrowing programme and the Market Stabilization Scheme;
(iv) State Development Loans (SDLs) of the State Governments issued from time to time under the market borrowing programme; and
(v) Any other instrument as may be notified by the Reserve Bank of India.
Provided that the securities (including margin) referred to above, if acquired under the Reserve Bank- Liquidity Adjustment Facility (LAF), shall not be treated as an eligible asset for this purpose.
Explanation: For the above purpose, "market borrowing programme" shall mean the domestic rupee loans raised by the Government of India and the State Governments from the public and managed by the Reserve Bank of India through issue of marketable securities, governed by the Government Securities Act, 2006 and the Regulations framed thereunder, through an auction or any other method, as specified in the Notification issued in this regard.
2. Encumbered SLR securities shall not be included for the purpose of computing the percentage specified above.
Provided however that for the purpose of computing the percentage of assets referred to hereinabove, the following shall be included, namely :
(i) securities lodged with another institution for an advance or any other credit arrangement to the extent to which such securities have not been drawn against or availed of; and
(ii) securities offered as collateral to the Reserve Bank of India for availing liquidity assistance from Marginal Standing Facility (MSF) up to one percent of the total net demand and time liabilities in India carved out of the required SLR portfolio of the bank concerned.
3. In computing the amount for the above purpose, the following shall be deemed to be cash maintained in India:
(i) The deposit required under sub-section (2) of Section 11 of the Banking Regulation Act, 1949 to be made with the Reserve Bank by a banking company incorporated outside India;
(ii) Any balances maintained by a scheduled bank with the Reserve Bank in excess of the balance required to be maintained by it under Section 42 of the Reserve Bank of India Act, 1934 (2 of 1934); and
(iii) Net balances in current accounts with other scheduled commercial banks in India.
( R. Gandhi )
Executive Director
Related Notification
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/516 · issued 09 May 2011. The plain-English explanation above is BankPulse’s own independent summary.
Update internal systems to include only eligible SLR securities as per the new list (dated securities up to May 6, 2011, T-bills, G-secs, SDLs, etc.).
📜 Compliance
Replace old SLR notification references with the new May 9, 2011 notification for compliance.
Ensure SLR assets exclude securities acquired under LAF (including margin).
Note that MSF borrowing up to 1% of NDTL is available from May 7, 2011, but does not affect SLR asset computation.
Review encumbered securities: they cannot be counted for SLR unless not drawn against.
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 Commercial Banks (excluding RRBs), Treasury and ALM departments, Compliance and risk management teams), your first concrete step on “RBI Updates SLR Maintenance Rules for Banks (May 2011)” is: “Replace old SLR notification references with the new May 9, 2011 notification for compliance.” (RBI issued this 09 May 2011).
Action required: Replace old SLR notification references with the new May 9, 2011 notification for compliance.
Action required: Ensure SLR assets exclude securities acquired under LAF (including margin).
Action required: Update internal systems to include only eligible SLR securities as per the new list (dated securities up to May 6, 2011, T-bills, G-secs, SDLs, etc.).
Action required: Note that MSF borrowing up to 1% of NDTL is available from May 7, 2011, but does not affect SLR asset computation.
Action required: Review encumbered securities: they cannot be counted for SLR unless not drawn against.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
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.
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BankPulse Compliance Evidence Pack — generated 03 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=6393&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.
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