What changed
The CRR exemption on credit disbursed to new MSME borrowers, originally available until the fortnight ending October 1, 2021, has been extended to the fortnight ending December 31, 2021. All other terms, including the ₹25 lakh per borrower cap, remain unchanged.
What it means for you
Banks can continue to lower their CRR requirement by deducting eligible new MSME loans from NDTL, improving liquidity without additional cost. This extension supports ongoing MSME lending momentum and encourages banks to onboard new borrowers. The relief is temporary and expires after December 2021.
What you must do
- Update internal CRR calculation systems to reflect the extended cut-off date of December 31, 2021.
- Continue identifying and disbursing eligible new MSME loans up to ₹25 lakh per borrower to maximize CRR benefit.
- Monitor the fortnightly NDTL deduction limits to ensure compliance with the extended timeline.
- Communicate the extension to MSME lending teams to sustain origination efforts.
Who it affects
Scheduled Commercial Banks, MSME lending departments, Treasury and compliance teams, New MSME borrowers seeking credit up to ₹25 lakh
What is the maximum CRR exemption per borrower under this circular?
The exemption is limited to credit disbursed up to ₹25 lakh per new MSME borrower.
Until when can banks avail this CRR relief?
The relief applies to credit disbursed up to the fortnight ending December 31, 2021.
Does this circular change any other terms from the February 2021 circular?
No, only the validity period is extended; all other instructions remain the same.