What changed
The daily minimum maintenance of Cash Reserve Ratio (CRR) was reduced from 99% to 95% of the requirement. This change applies to Scheduled State Cooperative Banks and Regional Rural Banks, effective from the fortnight beginning September 21, 2013.
What it means for you
Banks now have more flexibility in managing daily CRR compliance, as they can maintain a lower daily minimum (95% instead of 99%) without penalty. This eases short-term liquidity management, especially during periods of volatile cash flows. However, the overall CRR requirement remains unchanged; only the daily maintenance floor is lowered.
What you must do
- Update internal CRR monitoring systems to reflect the new 95% daily minimum maintenance threshold.
- Inform treasury and compliance teams about the change effective from the fortnight starting September 21, 2013.
- Review liquidity management strategies to leverage the increased daily flexibility without breaching the overall CRR requirement.
Who it affects
Scheduled State Cooperative Banks, Regional Rural Banks, Treasury and compliance departments of these banks
Does this change reduce the overall CRR requirement?
No, the overall CRR requirement remains the same. Only the daily minimum maintenance requirement is reduced from 99% to 95% of the prescribed CRR.
From when is this new daily maintenance requirement applicable?
It is effective from the fortnight beginning September 21, 2013.