RBI revives instructions on SLR maintenance for balance held under SDF and SLR holding in HTM category

In partial modification to notification DBR.Ret.BC No.11/12.02.001/2018-19 dated December 05, 2018, the Reserve Bank of India notified on Friday (08/04/2022) that the balances held by banks with the RBI under the SDF shall be an eligible Statutory Liquidity Ratio (SLR) asset and such balances shall form part of “Cash” for SLR maintenance. Banks shall report the SDF balances under “Cash in hand” in Form VIII or Form I, as applicable.

However, the balances held by banks with RBI under the SDF shall not be eligible for Cash Reserve Ratio (CRR) maintenance, it said.

In a separate circular, the existing special dispensation of enhanced Held to Maturity (HTM) limit of 22 per cent of Net Demand and Time Liabilities (NDTL), for Statutory Liquidity Ratio (SLR) , RBI permitted banks to include securities acquired between April 1, 2022, and March 31, 2023, under the enhanced limit of 23 per cent.

3. On a review, it has now been decided to further enhance the existing HTM limit of 22 per cent of NDTL to 23 per cent of NDTL and allow banks to include securities acquired between April 1, 2022 and March 31, 2023, under the enhanced limit of 23 per cent.

According to the RBI circular, the enhanced HTM limit of 23 per cent shall be restored to 19.5 percent in a phased manner, beginning from the quarter ending June 30, 2023, i.e. the excess SLR securities acquired by banks during the period September 1, 2020, to March 31, 2023, shall be progressively reduced such that the total SLR securities held in the HTM category as a percentage of the NDTL do not exceed     19.50 per cent as on March 31, 2024, in the following manner.

    22.00 per cent as of June 30, 2023

    21.00 per cent as of September 30, 2023

    20.00 per cent as of December 31, 2023

    19.50 per cent as of March 31, 2024

Related post;