The Reserve Bank of India has increased the daily minimum Cash Reserve Ratio (CRR) maintenance requirement from 90% to 99%, effective 16 October 2026, under Section 42(1) of the RBI Act, 1934. The move aims to enhance liquidity discipline among banks.
RBI Tightens CRR Compliance Norms
The Reserve Bank of India (RBI) has issued a directive increasing the daily minimum Cash Reserve Ratio (CRR) maintenance threshold from 90% to 99% of the required amount, effective 16 October 2026. The change is implemented under Section 42(1) of the Reserve Bank of India Act, 1934, and applies to all scheduled commercial banks maintaining CRR accounts with the RBI.
This significant tightening is intended to improve compliance and reduce the volatility of daily liquidity conditions in the banking system. By mandating that banks maintain nearly full compliance on a daily basis, the RBI aims to discourage reliance on end-of-cycle adjustments and promote more stable reserves management. Banks with persistent shortfalls may face stricter supervisory scrutiny under the revised norms.
Practitioners advising financial institutions must now update internal compliance frameworks to align with the new 99% daily requirement. The change underscores the RBI’s focus on macroprudential stability and may influence short-term interbank liquidity operations in the near term.
Citations
- Reserve Bank of India Act, 1934, Section 42(1)