**Summary:**
This notification, issued by the Reserve Bank of India (RBI) on December 7, 2016, announces the withdrawal of the incremental Cash Reserve Ratio (CRR) requirement for all Scheduled Commercial Banks, Regional Rural Banks, Scheduled Primary Urban Cooperative Banks, and Scheduled State Cooperative Banks.
Specifically, effective from the fortnight beginning December 10, 2016, the requirement to maintain a 100% incremental CRR on the increase in Net Demand and Time Liabilities (NDTL) between September 16, 2016, and November 11, 2016, has been rescinded. This withdrawal supersedes the previous notification DBR.No.Ret.BC.4012.01.001/2016-17 dated November 26, 2016, which initially mandated the incremental CRR under Section 42(1A) of the Reserve Bank of India Act, 1934.
For further information, contact S.S. Barik, Chief General Manager-in-Charge, or Sudarshan Sen, Executive Director, Department of Banking Regulation, Central Office, Centre 1, Cuffe Parade, Colaba, Mumbai 400 005. Phone: 91-22-2222189. Fax: 91-22-22160970. Email: cgmicdbodcorbi.org.in. The reference number for the circular is DBR.No.Ret.BC.4612.01.001/2016-17 and for the notification is DBR.No.Ret.BC.4512.01.001/2016-17.
Key Entities Referenced
Reserve Bank of India Act, 1934: The primary legislation authorizing the Reserve Bank of India's actions.
Section 42 of the Reserve Bank of India Act, 1934: Section of the Reserve Bank of India Act, 1934, which empowers the bank to mandate CRR (cash reserve ratio) requirements.
Scheduled Commercial Banks: A category of banks in India that are listed in the Second Schedule to the Reserve Bank of India Act, 1934.
Regional Rural Banks: Regional Rural Banks are financial institutions in India that operate at a regional level.
Scheduled Primary Urban Cooperative Banks: Cooperative banks in urban areas that are included in the Second Schedule to the Reserve Bank of India Act, 1934.
Scheduled State Co operative Banks: State Co operative Banks that are included in the Second Schedule to the Reserve Bank of India Act, 1934.
CRR (cash reserve ratio): The fraction of deposits banks are required to keep with the RBI.
Mumbai, Maharashtra: Location of the Central Office of the Department of Banking Regulation, Reserve Bank of India.
भारतीय �रजवर् ब�क
________________RESERVE BANK OF INDIA________________
www.rbi.org.in
RBI/2016-17/174
DBR.No.Ret.BC.46/12.01.001/2016-17 December 7, 2016
The Chairperson / CEOs of all Scheduled Commercial Banks/ Regional Rural Banks
/ All Scheduled Primary (Urban) Co-operative Banks / All Scheduled State Co-
operative Banks
Dear Sir,
Reserve Bank of India Act, 1934 – Section 42(1A)
Withdrawal of the Incremental CRR
Please refer to our circular DBR.No.Ret.BC.41/12.01.001/2016-17 dated November
26, 2016 whereby all scheduled banks were required to maintain, under Section
42(1A), incremental cash reserve ratio (CRR) of 100 per cent of the increase in
NDTL between September 16, 2016 and November 11, 2016, effective the fortnight
beginning November 26, 2016.
2. On a review, it has been decided to withdraw the requirement of incremental CRR,
effective the fortnight beginning December 10, 2016.
3. A copy of the relative notification DBR.No.Ret.BC.45/12.01.001/2016-17 dated
December 7, 2016 is enclosed.
Yours faithfully,
(S S Barik)
Chief General Manager-in-Charge
Department of Banking Regulation, Central Office, Centre 1,Cuffe Parade, Colaba, Mumbai - 400 005,
Tele: 91-22-22-22189 Fax: 91-22-22160970 E-mail: cgmicdbodco@rbi.org.inभारतीय �रजवर् ब�क
________________RESERVE BANK OF INDIA________________
www.rbi.org.in
RBI/2016-17/
DBR.No.Ret.BC.45/12.01.001/2016-17 December 7, 2016
Notification
In exercise of the powers conferred by sub-section (1A) of Section 42 of the
Reserve Bank of India Act, 1934, and in supersession of its notification
DBR.No.Ret.BC.40/12.01.001/2016-17 dated November 26, 2016, the Reserve
Bank of India hereby withdraws with effect from fortnight beginning December 10,
2016 the requirement by all Scheduled Commercial Banks/ Regional Rural Banks /
all Scheduled Primary (Urban) Co-operative Banks / all Scheduled State Co-
operative Banks, to maintain an incremental cash reserve ratio (CRR) of 100 per
cent on increase in net demand and time liabilities (NDTL) between September 16,
2016 and November 11, 2016.
(Sudarshan Sen)
Executive Director
Department of Banking Regulation, Central Office, Centre 1,Cuffe Parade, Colaba, Mumbai - 400 005,
Tele: 91-22-22-22189 Fax: 91-22-22160970 E-mail: cgmicdbodco@rbi.org.in