CRR Relief for New MSME Loans Extended to Dec 2021
Current · Source: Reserve Bank of India · RBI/2021-22/30 · issued 05 May 2021 · ~1 min read
Quick answerRBI extends CRR exemption on fresh credit to new MSME borrowers up to ₹25 lakh per borrower until the fortnight ending December 31, 2021. Banks can deduct such disbursements from NDTL for CRR calculation, freeing up liquidity for MSME lending.
The rule, in the simplest words
Banks can lend up to ₹25 lakh to new MSME borrowers without having to keep as much cash in reserve.
This exemption is only for new MSME borrowers and is available until the fortnight ending December 31, 2021.
How it plays out — a real example
A credit & lending officer in Indore, Mr. Kumar, is excited to offer a ₹20 lakh loan to a new MSME borrower. Since this loan is eligible for the CRR exemption, Mr. Kumar can deduct it from the bank's NDTL, freeing up liquidity for more lending. This extension of the exemption will help Mr. Kumar's bank continue to support MSME lending momentum in the region.
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
❓ Common questions
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.
📜 Read the original circular — full text as issued by RBI
RBI/2021-22/30
DoR.RET.REC.09/12.01.001/2021-22
May 05, 2021
All Scheduled Commercial Banks
Madam/Sir
Credit to MSME Entrepreneurs
Please refer to our circular DOR.No.Ret.BC.37/12.01.001/2020-21 dated February 5, 2021 , on captioned subject.
2. In terms of the above circular, Scheduled Commercial Banks were allowed to deduct the amount equivalent to credit disbursed to new MSME borrowers from their Net Demand and Time Liabilities (NDTL) for calculation of the Cash Reserve Ratio (CRR). This exemption was available up to ₹ 25 lakh per borrower for the credit disbursed up to the fortnight ending October 1, 2021.
3. It has been decided to extend this exemption for such credits disbursed up to the fortnight ending December 31, 2021. All other instructions contained in the circular ibid remain same.
Yours faithfully
(Thomas Mathew)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-22/30 · issued 05 May 2021. The plain-English explanation above is BankPulse’s own independent summary.
Update internal CRR calculation systems to reflect the extended cut-off date of December 31, 2021.
📜 Compliance
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.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are an IT/Systems lead at a bank this circular applies to (Scheduled Commercial Banks, MSME lending departments, Treasury and compliance teams, New MSME borrowers seeking credit up to ₹25 lakh), your first concrete step on “CRR Relief for New MSME Loans Extended to Dec 2021” is: “Update internal CRR calculation systems to reflect the extended cut-off date of December 31, 2021.” (RBI issued this 05 May 2021).
Circular: RBI/2021-22/30 -- CRR Relief for New MSME Loans Extended to Dec 2021
Issued: 05 May 2021
Action required: Update internal CRR calculation systems to reflect the extended cut-off date of December 31, 2021.
Action required: Continue identifying and disbursing eligible new MSME loans up to ₹25 lakh per borrower to maximize CRR benefit.
Action required: Monitor the fortnightly NDTL deduction limits to ensure compliance with the extended timeline.
Action required: Communicate the extension to MSME lending teams to sustain origination efforts.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12084&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.