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Date: 12-Sep-2023 Category: Extra Ordinary State: Union Government Country: India

In exercise of the powers conferred by sub section 1A of Section 42 of the Reserve Bank of India Act, 1934, the Reserve Bank of India hereby directs that all Scheduled Commercial Banks Regional Rural Banks

Issued by Reserve Bank of India · Not Applicable

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Executive Summary & Key Takeaways

What it means

  • The Reserve Bank of India (RBI) has issued a notification directing scheduled banks to maintain an additional average daily balance with the RBI, effective from the fortnight beginning August 12, 2023.

Key Changes

  • All Scheduled Commercial Banks, Regional Rural Banks, all Scheduled Primary (Urban) Co-operative Banks and all Scheduled State Co-operative Banks are required to comply.
  • Banks must maintain an additional average daily balance with the RBI, above the balance already required under Section 42(1) of the Reserve Bank of India Act, 1934.
  • The amount of this additional average daily balance must be at least 10% of the increase in the bank's net demand and time liabilities (NDTL) between May 19, 2023, and July 28, 2023.

Impact Analysis

Impact on Banks

  • Increased compliance and reporting burden on banks to ensure adherence to the new directives.

Suggested Action Items for Banks

  • Communicate the changes to relevant departments within the bank to ensure compliance.

Impact on Economy

  • The impact on economic growth will depend on the extent to which the reduced lending capacity affects investment and consumption.

Key Entities Referenced

Reserve Bank of India (RBI): The central bank of India, responsible for regulating the banking system and monetary policy. Scheduled Commercial Banks: Banks included in the Second Schedule to the Reserve Bank of India Act, 1934. Regional Rural Banks (RRBs): Banks established under the Regional Rural Banks Act, 1976 to provide credit and other facilities to small farmers, agricultural laborers, and artisans in rural areas. Scheduled Primary (Urban) Co-operative Banks: Co-operative banks that operate in urban areas and are included in the Second Schedule to the Reserve Bank of India Act, 1934. Scheduled State Co-operative Banks: Co-operative banks at the state level that are included in the Second Schedule to the Reserve Bank of India Act, 1934. Reserve Bank of India Act, 1934: The Act that governs the functioning of the Reserve Bank of India.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 xxxGIDHxxx सी.जी.-एम.एच.-अ.-12092023-248665 xxxGIDExxx CG-MH-E-12092023-248665 असाधारण EXTRAORDINARY भाग III—खण् ड 4 PART III—Section 4 प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 633] नई कदल्ली, मगं लर्ार, जसतम्ब र 12, 2023/भाद्र 21, 1945 No. 633] NEW DELHI, TUESDAY, SEPTEMBER 12, 2023/BHADRA 21, 1945 भारतीय ररज़र् व बकैं अजधसचू ना म ंबई, 10 अगस्ट्त, 2023 जर्जर्.आरईटी.आरईसी.30/12.01.001/2023-24.—भारतीय ररज़र्व बैंक अजधजनयम, 1934 की धारा 42 की उप-धारा (1ए) द्वारा प्रदत्त िजियों का प्रयोग करते हुए, भारतीय ररज़र्व बैंक एतदद्वारा जनदिे देता ह ै कक सभी अन सूजचत र्ाजणजययक बैंक/क्षेत्रीय ग्रामीण बैंक/सभी अन सूजचत प्राथजमक (िहरी) को-ऑपरेरटर् बैंक/सभी अन सूजचत रायय सहकारी बैंक, 12 अगस्ट्त 2023 स े ि रू होने र्ाले पखर्ाडे स े भारतीय ररिर्व बैंक म ें जनम्नजलजखत को बनाए रखेंग:े (i) धारा 42 की उपधारा (1) के अंतगतव बनाए रखन े के जलए आर्श्यक औसत दैजनक िेष के अलार्ा अजतररि औसत दैजनक िेष; और (ii) ऐसे अजतररि औसत दैजनक िषे की राजि 19 मई 2023 और 28 िल ाई 2023 के बीच जनर्ल मांग और आर्जधक देयताओं म ेंर्ृजि के 10 प्रजतित स े कम नहीं होगी। ियतं क मार दाि, कायवपालक जनदेिक [जर्ज्ञापन III/4/असा./418/2023-24] 5782 GI/2023 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] RESERVE BANK OF INDIA NOTIFICATION Mumbai, the 10th August, 2023 DOR.RET.REC.30/12.01.001/2023-24.—In exercise of the powers conferred by sub-section (1A) of Section 42 of the Reserve Bank of India Act, 1934, the Reserve Bank of India hereby directs that all Scheduled Commercial Banks / Regional Rural Banks / all Scheduled Primary (Urban) Co-operative Banks / all Scheduled State Co-operative Banks, shall maintain with the Reserve Bank of India, with effect from the fortnight beginning August 12, 2023: (i) an additional average daily balance over and above the average daily balance required to be maintained under sub- section (1) of Section 42; and (ii) that the amount of such additional average daily balance shall not be less than 10 per cent of the increase in net demand and time liabilities between May 19, 2023 and July 28, 2023. JAYANT KUMAR DASH, Executive Director [ADVT.-III/4/Exty./418/2023-24] Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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