RBI has revised the daily minimum cash reserve ratio (CRR) maintenance requirement, allowing banks to maintain 90% of required CRR daily, with fortnightly average compliance. Aims to ease liquidity management for scheduled banks.
RBI Adjusts Daily CRR Maintenance Norms
The Reserve Bank of India, in a circular dated October 9, 2026 (RBI/2026-27/290), has clarified the daily minimum cash reserve ratio (CRR) maintenance requirement under Section 42(1) of the RBI Act, 1934. Scheduled banks are now permitted to maintain not less than 90 percent of the required CRR on a daily basis during the fortnight, provided the average daily maintenance equals or exceeds the stipulated CRR.
This modification provides greater flexibility in liquidity management while ensuring overall reserve compliance. Previously, strict daily adherence was required, which at times posed operational challenges during volatile liquidity conditions. The revised norm allows banks to optimise surplus liquidity deployment without breaching regulatory requirements, as long as the fortnightly average is met.
The central bank emphasized that this change is aimed at enhancing operational efficiency without compromising monetary control objectives. It reflects a calibrated approach to liquidity regulation, aligning with global best practices in reserve management.
For banking practitioners, this update simplifies compliance monitoring and reduces the risk of penal consequences for minor daily shortfalls. Institutions should revise their treasury operations manuals and reporting mechanisms to incorporate the 90% daily threshold under the new regime.
Citations
- Section 42(1), Reserve Bank of India Act, 1934