What changed
The minimum daily maintenance of Cash Reserve Ratio (CRR) was reduced from 99% to 95% of the required amount. This change applies to all scheduled commercial banks except Regional Rural Banks, effective from the fortnight beginning September 21, 2013.
What it means for you
Banks now have greater leeway to dip into their CRR balances during the fortnight without penalty, as long as the average is met. This eases short-term liquidity management and reduces the risk of inadvertent breaches on low-balance days.
What you must do
- Update your internal CRR monitoring systems to reflect the new 95% daily minimum threshold.
- Inform treasury and ALM teams about the increased flexibility in daily CRR maintenance.
- Review liquidity forecasting models to take advantage of the lower daily floor.
- Ensure compliance with the revised requirement from the fortnight starting September 21, 2013.
Who it affects
All scheduled commercial banks (excluding Regional Rural Banks), Treasury and ALM departments, Compliance and risk management teams
What is the new daily minimum CRR maintenance percentage?
The daily minimum maintenance has been reduced from 99% to 95% of the required CRR, effective from the fortnight beginning September 21, 2013.
Does this circular apply to Regional Rural Banks?
No, the circular explicitly excludes Regional Rural Banks from its scope.
What was the previous daily minimum requirement before this change?
The previous requirement was 99% of the CRR, as per the circular dated July 23, 2013.