**Policy Summary: Gradual Restoration of Cash Reserve Ratio (CRR)**
This circular, issued by the Reserve Bank of India (RBI) on February 5, 2021, outlines the phased restoration of the Cash Reserve Ratio (CRR) for all banks. This reverses the 100 basis points reduction to 3.00% of Net Demand and Time Liabilities (NDTL) that was implemented on March 28, 2020, and was effective for one year, ending March 26, 2021.
The CRR will be restored in two phases:
* **Phase 1:** An increase to 3.50% of NDTL, effective from the reporting fortnight beginning March 27, 2021.
* **Phase 2:** A further increase to 4.00% of NDTL, effective from the reporting fortnight beginning May 22, 2021.
This decision, announced in the Statement on Developmental and Regulatory Policies on February 5, 2021, aims to gradually restore the CRR in a non-disruptive manner.
The notification number for this policy is DOR.No.Ret.BC.38/2.01.001/2020-21.
For further information, contact Thomas Mathew, Chief General Manager, Department of Regulation, Central Office, Reserve Bank of India, 5th floor, Amar Building, Sir P.M. Road, Fort, Mumbai – 400001. Tel No: 22661602/22601000. Fax No.: 022-22705691.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and monetary policy.
Cash Reserve Ratio (CRR): The percentage of a bank's total deposits that it is required to maintain with the Reserve Bank of India as a reserve.
Net Demand and Time Liabilities (NDTL): The total deposits held by a bank, including demand deposits (like savings and current accounts) and time deposits (like fixed deposits).
Reserve Bank Act, 1934: An act of the Parliament of India that forms the basis of the Reserve Bank of India's establishment and operations.
Banking Regulation Act, 1949: An act of the Parliament of India that regulates the Indian banking system.
Thomas Mathew: Chief General Manager at Reserve Bank of India, as indicated by the notification.
J.K.Dash: Executive Director at Reserve Bank of India, as indicated by the notification.
Mumbai, Maharashtra: Location of the Central Office, Department of Regulation of Reserve Bank of India
भारतीय �रज़व र् बक�
______________________RESERVE BANK OF INDIA ______________________
www.rbi.org.in
RBI/2020-21/90
DOR.No.Ret.BC.35/12.01.001/2020-21 February 5, 2021
All Banks
Dear Sir / Madam
Maintenance of Cash Reserve Ratio (CRR)
Please refer to our Circular DOR.No.Ret.BC.49/12.01.001/2019-20 dated March 27,
2020, on the captioned subject. The cash reserve ratio (CRR) of all banks was
reduced by 100 basis points to 3.00 per cent of their Net Demand and Time liabilities
(NDTL) effective from the reporting fortnight beginning March 28, 2020. The
dispensation was available for a period of one year ending March 26, 2021.
2. As announced in paragraph 2 of the Statement on Developmental and Regulatory
Policies dated February 05, 2021, it has been decided to gradually restore the CRR
in two phases in a non-disruptive manner. Accordingly, banks are required to
maintain the CRR at 3.50 per cent of their NDTL effective from the reporting fortnight
beginning March 27, 2021 and 4.00 per cent of their NDTL effective from fortnight
beginning May 22, 2021.
3. A copy of the relative notification DOR.No.Ret.BC.38/12.01.001/2020-21 dated
February 05, 2021 is enclosed.
Yours faithfully
(Thomas Mathew)
Chief General Manager
Encls: as above
िविनयमन िवभाग, क�द्रीय काया�लय, 5वी ं मंिजल, अमर भवन, सर पी एम रोड, फोट�, मुंबई 400001
___________________________________________________________________________________________________________________
टेलीफ़ोन /Tel No: 22661602/2260100 फै� / Fax No.: 022-22705691
Department of Regulation, Central Office, 5th floor, Amar Building, Sir P.M. Road, Fort, Mumbai – 400001.
िह �ी आसान है, इस का प्रयोग बढ ाइयेDOR.No.Ret.BC.38/12.01.001/2020-21 February 05, 2021
Notification
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), and in partial modification of the earlier notification
DOR.No.Ret.BC.50/12.01.001/2019-20 dated March 27, 2020, the Reserve Bank of India
hereby notifies that the average Cash Reserve Ratio (CRR) required to be maintained by
every bank shall be 3.50 per cent of its net demand and time liabilities effective from the
reporting fortnight beginning March 27, 2021 and 4.00 per cent of net demand and time
liabilities effective from fortnight beginning May 22, 2021.
(J.K.Dash)
Executive Director