What changed
This master circular updates and consolidates all prior instructions on statutory reserves for UCBs issued up to June 30, 2013, replacing the July 2, 2012 version, and was updated as on August 28, 2013. It reiterates that scheduled UCBs must maintain CRR under Section 42 of RBI Act (no floor or ceiling since April 1, 2007), while non-scheduled UCBs follow Section 18 of BR Act. SLR requirements for all UCBs remain under Section 24 of BR Act.
What it means for you
UCBs must ensure strict compliance with CRR and SLR norms as per the consolidated guidelines. The daily register for monitoring liquidity positions is non-negotiable and must be reviewed by the CEO daily. Scheduled UCBs face no statutory floor or ceiling on CRR, giving RBI flexibility to adjust rates as needed for monetary stability.
What you must do
- Maintain a daily register of cash reserve and liquid assets as per Annex 8 format.
- Ensure CEO reviews the daily liquidity register for compliance with Sections 18 and 24 of BR Act.
- For scheduled UCBs, compute CRR as per Section 42 of RBI Act without assuming any floor or ceiling.
- For non-scheduled UCBs, adhere to CRR requirements under Section 18 of BR Act.
- Stay updated on any future RBI notifications that may change CRR or SLR rates.
Who it affects
All Primary (Urban) Co-operative Banks (scheduled and non-scheduled), Chief Executive Officers of UCBs, Compliance and treasury departments of UCBs
What is the CRR requirement for scheduled UCBs?
Scheduled UCBs must maintain a minimum average daily balance with RBI as per Section 42 of RBI Act. Since April 1, 2007, RBI can prescribe CRR without any floor or ceiling rate, based on monetary stability needs.
Do non-scheduled UCBs have different CRR rules?
Yes, non-scheduled UCBs are governed by Section 18 of the Banking Regulation Act, 1949 (as applicable to co-operative societies), not Section 42 of RBI Act.
Is a daily register mandatory for all UCBs?
Yes, all UCBs must maintain a daily register as per Annex 8 showing cash reserve and liquid assets positions. The CEO must review it daily to ensure compliance.