Revision in maintenance of Cash Reserve Ratio (CRR)

In the Statement on Developmental and Regulatory Policies, RBI announced that the cash reserve ratio (CRR) of all banks by 50 bps in two equal tranches of 25 bps each to 4.0 per cent of net demand and time liabilities (NDTL) with effect from the fortnight beginning December 14, 2024, and December 28, 2024, respectively. This will restore the CRR to 4 per cent of NDTL, which was prevailing before the commencement of the policy tightening cycle in April 2022. This reduction in the CRR would release primary liquidity of about ₹1.16 lakh crore to the banking system.

“In exercise of the powers conferred under the sub-section (1) of Section 42 of the Reserve Bank 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.34/12.01.001/2022-23 dated May 04, 2022, the Reserve Bank of India hereby notifies that the average Cash Reserve Ratio (CRR) required to be maintained by every bank shall be 4.25 per cent of its net demand and time liabilities effective from the reporting fortnight beginning December 14, 2024, and 4.00 per cent of net demand and time liabilities effective from fortnight beginning December 28, 2024” said RBI notification.

Accordingly, banks are required to maintain the CRR at 4.25 per cent of their NDTL effective from the reporting fortnight beginning December 14, 2024, and 4.00 per cent of their NDTL effective from the fortnight beginning December 28, 2024.