CRR cut by 100 bps to 3% in four tranches from Sep 2025
Current · Source: Reserve Bank of India · RBI/2025-26/46 · issued 06 Jun 2025 · ~1 min read
Quick answerRBI reduces CRR by 100 bps to 3% of NDTL in four equal tranches of 25 bps each, effective from fortnights beginning Sep 6, Oct 4, Nov 1, and Nov 29, 2025. This frees up bank liquidity and supports lending.
The rule, in the simplest words
Banks must keep less cash with RBI (the central bank) starting September 6, 2025.
The amount of cash to keep drops in four steps: 3.75%, then 3.5%, then 3.25%, and finally 3.0% of what customers have deposited (NDTL).
The four steps happen on September 6, October 4, November 1, and November 29, 2025.
This frees up money for banks to lend more or invest, but they must plan carefully each fortnight.
How it plays out — a real example
A credit & lending officer in Indore, Priya, checks her bank's new CRR schedule. She sees that from September 6, her branch must keep only 3.75% of customer deposits with RBI instead of the old 4%. She tells her team they can now use the extra cash to approve more gold loans for local farmers before the harvest season.
What changed
The CRR for all banks is being reduced from the current level to 3.0% of NDTL, phased in four steps: 3.75% from Sep 6, 3.5% from Oct 4, 3.25% from Nov 1, and 3.0% from Nov 29, 2025. This replaces the earlier CRR requirement set in December 2024.
What it means for you
Banks will have to set aside less cash with RBI, releasing substantial liquidity into the system. This can lower funding costs and improve net interest margins, but also requires careful liquidity management during the transition. Lenders can use the freed funds for credit expansion or investment.
What you must do
Update your CRR maintenance schedules to reflect the new phased rates from September 6, 2025 onwards.
Reassess liquidity buffers and treasury strategies to deploy the released funds optimally.
Communicate the changes to your ALCO and treasury teams for smooth fortnightly compliance.
Monitor NDTL calculations accurately to avoid penalties during the transition.
Who it affects
All scheduled commercial banks, Treasury and ALM teams, Lending and credit departments
❓ Common questions
When does the first CRR reduction take effect?
The first tranche of 25 bps reduction, bringing CRR to 3.75%, is effective from the reporting fortnight beginning September 6, 2025.
What is the final CRR rate after all tranches?
After four equal reductions, the CRR will stand at 3.0% of NDTL, effective from the fortnight beginning November 29, 2025.
Does this circular apply to all banks?
Yes, the reduction applies to all banks covered under Section 42 of the RBI Act, 1934 and Section 18 of the Banking Regulation Act, 1949.
📜 Read the original circular — full text as issued by RBI
RBI/2025-26/46
DoR.RET.REC.23/12.01.001/2025-26
June 06, 2025
All banks,
Madam / Sir,
Maintenance of Cash Reserve Ratio (CRR)
Please refer to our circular DoR.RET.REC.52/12.01.001/2024-25 dated December 06, 2024 and relative notification on the captioned subject.
2. As announced in the Governor’s Statement dated June 06, 2025 , it has been decided to reduce the Cash Reserve Ratio (CRR) of all banks by 100 basis points in four equal tranches of 25 basis points each to 3.0 per cent of net demand and time Liabilities (NDTL). Accordingly, banks are required to maintain the CRR at 3.75 per cent, 3.5 per cent, 3.25 per cent and 3.0 per cent of their NDTL effective from the reporting fortnight beginning September 6, October 4, November 1 and November 29, 2025, respectively.
3. A copy of the relative notification DoR.RET.REC.24/12.01.001/2025-26 dated June 6, 2025 is enclosed .
Yours faithfully,
(Manoranjan Padhy)
Chief General Manager
Encl.: As above
DoR.RET.REC.24/12.01.001/2025-26
June 06, 2025
NOTIFICATION
In exercise of the powers conferred under the sub-section (1) of Section 42 of the Reserve Bank of India Act, 1934 and sub-section (1) of Section 18 of the Banking Regulation Act, 1949 (10 of 1949), read with Section 56 thereof, and in partial modification of the earlier notification DoR.RET.REC.53/12.01.001/2024-25 dated December 06, 2024 , the Reserve Bank of India hereby notifies that the average Cash Reserve Ratio (CRR) required to be maintained by every bank shall be 3.75 per cent, 3.5 per cent, 3.25 per cent and 3.0 per cent of its net demand and time liabilities effective from the reporting fortnight beginning September 6, October 4, November 1 and November 29, 2025, respectively.
(R. Lakshmi Kanth Rao)
Executive Director
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2025-26/46 · issued 06 Jun 2025. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All scheduled commercial banks, Treasury and ALM teams, Lending and credit departments), your first concrete step on “CRR cut by 100 bps to 3% in four tranches from Sep 2025” is: “Update your CRR maintenance schedules to reflect the new phased rates from September 6, 2025 onwards.” (RBI issued this 06 Jun 2025).
Circular: RBI/2025-26/46 -- CRR cut by 100 bps to 3% in four tranches from Sep 2025
Issued: 06 Jun 2025
Action required: Update your CRR maintenance schedules to reflect the new phased rates from September 6, 2025 onwards.
Action required: Reassess liquidity buffers and treasury strategies to deploy the released funds optimally.
Action required: Communicate the changes to your ALCO and treasury teams for smooth fortnightly compliance.
Action required: Monitor NDTL calculations accurately to avoid penalties during the transition.
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=12858&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.
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