What changed
The Cash Reserve Ratio (CRR) for Scheduled Primary (Urban) Co-operative Banks was reduced from 4.25% to 4.0% of net demand and time liabilities (NDTL). This change takes effect from the fortnight beginning February 9, 2013, as per the notification dated January 30, 2013.
What it means for you
Urban co-operative banks will now need to hold less cash with RBI, releasing funds for lending or other operations. This 25 bps cut improves their liquidity position and may support credit growth. Banks should adjust their reserve maintenance calculations accordingly from the specified fortnight.
What you must do
- Update CRR maintenance calculations to 4.0% of NDTL from Feb 9, 2013 fortnight.
- Inform treasury and compliance teams about the revised CRR requirement.
- Acknowledge receipt of this circular to the respective RBI Regional Office.
- Review liquidity projections to utilize freed-up funds effectively.
Who it affects
Scheduled Primary (Urban) Co-operative Banks, Treasury departments of urban co-op banks, Compliance teams handling reserve requirements
When does the new CRR rate take effect?
The reduced CRR of 4.0% applies from the fortnight beginning February 9, 2013.
What was the previous CRR for these banks?
The earlier CRR was 4.25% of NDTL, as per the October 30, 2012 circular.
Does this apply to all urban co-operative banks?
Yes, it applies to all Scheduled Primary (Urban) Co-operative Banks covered under Section 42(1) of the RBI Act.