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UCBs: Daily CRR Maintenance Hiked to 99%

Current · Source: Reserve Bank of India · RBI/2013-14/159 · issued 24 Jul 2013 · ~1 min read
Quick answerFrom July 27, 2013, Scheduled Primary Urban Co-operative Banks must maintain 99% of their required CRR daily, up from 70%. This tightens liquidity management to curb forex volatility.
The rule, in the simplest words
How it plays out — a real example

Ramesh Patel, a treasury officer at Shree Urban Co‑op Bank in Indore, starts his day by checking the bank’s cash balance. With the new rule, he makes sure that 99% of the required CRR is kept on the books; if the balance is a little low, he quickly arranges an intra‑day borrowing so the bank stays compliant and avoids any penalty.

What changed

Previously, banks could keep as low as 70% of the required CRR on any day of the fortnight. The RBI has now raised this floor to 99%, effective from the fortnight starting July 27, 2013.

What it means for you

Urban co-operative banks will have far less flexibility in managing daily cash balances, as nearly the entire CRR must be maintained each day. This could strain short-term liquidity and increase the need for precise cash flow forecasting.

What you must do

Who it affects

All Scheduled Primary (Urban) Co-operative Banks, Treasury and cash management departments, Compliance and risk management teams

❓ Common questions

What was the previous minimum daily CRR maintenance requirement?

Banks were allowed to maintain a minimum of 70% of the required CRR on all days of the reporting fortnight.

When does the new 99% requirement take effect?

It is effective from the first day of the fortnight beginning July 27, 2013.

Why did RBI make this change?

The circular references a press release on additional measures to address foreign exchange market volatility.

📜 Read the original circular — full text as issued by RBI
RBI/2013-14/159 UBD.BPD. (SCB). CIR. No. 1 /12.03.000/2013-14 July 24, 2013 The Chief Executive Officers of All Scheduled Primary (Urban) Co-operative Banks Madam/Dear Sir, Section 42(1) of the  Reserve Bank of India Act, 1934 – Change in Daily Minimum Cash Reserve Maintenance Requirement Please refer to Press Release 2013-2014/154 dated July 23, 2013 , announcing additional measures to address foreign exchange market volatility. 2. As mentioned therein, currently, banks are allowed to maintain a minimum of 70 per cent of the required Cash Reserve Ratio (CRR) during a fortnight, which is applicable on all days of the reporting fortnight. It has now been decided to increase the requirement of minimum daily CRR balance maintenance to 99 per cent effective from the first day of the fortnight beginning July 27, 2013. Yours faithfully, (A.K.Bera) Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/159 · issued 24 Jul 2013. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
⚙️ Operations
  • Communicate the new requirement to treasury and operations teams immediately.
💻 IT / Systems
  • Update internal liquidity monitoring systems to flag any intra-fortnight shortfalls.
📜 Compliance
  • Review and adjust daily cash management processes to ensure 99% CRR compliance from July 27.
  • Assess impact on short-term borrowing and investment strategies.
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 Primary (Urban) Co-operative Banks, Treasury and cash management departments, Compliance and risk management teams), your first concrete step on “UCBs: Daily CRR Maintenance Hiked to 99%” is: “Review and adjust daily cash management processes to ensure 99% CRR compliance from July 27.” (RBI issued this 24 Jul 2013).

  1. Circular: RBI/2013-14/159 -- UCBs: Daily CRR Maintenance Hiked to 99%
  2. Issued: 24 Jul 2013
  3. Action required: Review and adjust daily cash management processes to ensure 99% CRR compliance from July 27.
  4. Action required: Update internal liquidity monitoring systems to flag any intra-fortnight shortfalls.
  5. Action required: Communicate the new requirement to treasury and operations teams immediately.
  6. Action required: Assess impact on short-term borrowing and investment strategies.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8268&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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