RBI has modified the daily minimum cash reserve maintenance requirement, allowing banks to maintain 90% of CRR on daily basis subject to fortnightly averaging, to enhance liquidity management.
RBI Amends Daily CRR Compliance Norms
The Reserve Bank of India, on October 9, 2026, issued revised instructions regarding the daily minimum cash reserve ratio (CRR) maintenance under Section 42(1) of the Reserve Bank of India Act, 1934. Scheduled banks are now permitted to maintain not less than 90 percent of the prescribed CRR on each day during a reporting fortnight, provided the average daily CRR maintained over the fortnight meets or exceeds the mandated requirement.
This adjustment aims to provide banks with greater flexibility in managing short-term liquidity pressures while ensuring system-wide monetary stability. The RBI emphasized that this operational latitude must not compromise the overall fortnightly average, reinforcing the central bank’s dual objectives of stability and efficiency in reserve management.
For practitioners, this change allows banks increased operational headroom in treasury management. However, internal compliance systems must be calibrated to monitor daily thresholds rigorously to avoid breaches. The amendment reflects ongoing regulatory efforts to balance prudential oversight with practical banking needs.
Citations
- Reserve Bank of India Act, 1934, Section 42(1)