What changed
The minimum daily maintenance of CRR was reduced from 99% to 95% of the required CRR balance, effective from the fortnight beginning September 21, 2013. This change applies to all Scheduled Primary (Urban) Co-operative Banks under Section 42(1) of the RBI Act, 1934.
What it means for you
UCBs now have more flexibility in managing daily cash reserves, as they need to maintain only 95% of the CRR requirement on a daily basis instead of 99%. This reduces the risk of penal charges for intra-fortnight shortfalls and improves liquidity management.
What you must do
- Update your treasury systems to reflect the new 95% daily minimum CRR maintenance threshold.
- Inform your ALCO and treasury teams about the reduced daily maintenance requirement effective September 21, 2013.
- Review your CRR compliance processes to ensure smooth transition from the earlier 99% norm.
Who it affects
Scheduled Primary (Urban) Co-operative Banks, Treasury and ALCO teams of UCBs, Compliance departments of UCBs
What is the effective date for this CRR daily maintenance change?
The reduced minimum daily maintenance of 95% is effective from the fortnight beginning September 21, 2013.
Does this circular 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, 1934.
What was the previous daily minimum CRR maintenance requirement?
The previous requirement was 99% of the required CRR balance, as per the circular dated July 24, 2013.