What changed
The SLR requirement for RRBs was lowered by 50 basis points, from 23% to 22.50% of Net Demand and Time Liabilities. This change takes effect from the fortnight beginning June 14, 2014, superseding the earlier circular dated August 1, 2012.
What it means for you
RRBs will now need to hold fewer funds in approved SLR securities, freeing up liquidity for lending or other investments. This aligns with RBI's accommodative stance to support credit flow and economic activity. Banks should adjust their asset-liability management to optimize the released funds.
What you must do
- Update internal SLR computation systems to reflect the new 22.50% threshold from June 14, 2014.
- Recalibrate investment portfolios to manage the freed liquidity effectively.
- Ensure compliance with the revised SLR maintenance as per the notification RPCD.CO.RRB.No.107/03.05.33/2013-14.
- Acknowledge receipt of the circular to the respective Regional Office.
Who it affects
All Regional Rural Banks (RRBs), Treasury and ALM teams of RRBs, Compliance departments of RRBs
What is the new SLR percentage for RRBs?
The SLR for RRBs has been reduced from 23% to 22.50% of Net Demand and Time Liabilities (NDTL), effective from the fortnight beginning June 14, 2014.
Why did RBI reduce the SLR for RRBs?
The reduction was announced in the Second Bi-monthly Monetary Policy statement for 2014-15 on June 3, 2014, as part of RBI's policy to ease liquidity and support economic growth.
Which circular is being modified by this notification?
This notification partially modifies the earlier circular RPCD.CO.RRB.BC.No.22/03.05.28(B)/2012-13 dated August 1, 2012, which had set the SLR at 23%.