The impact of the revised norm is expected to vary across banks depending on their liquidity positions and treasury management practices
RBI raises daily CRR requirement to 99%: The Reserve Bank of India (RBI) has raised the minimum daily cash reserve ratio (CRR) maintenance requirement to 99% from 90%. This change will take effect from 16 October, 2026. The move follows a review of the current liquidity condition in the banking system, RBI said in a release.
In a notification on Friday, RBI said banks will have to maintain a minimum daily balance from 90% to 99% of the prescribed CRR. CRR is the amount of deposits banks maintain with the RBI without getting any interest. This ratio currently stands at 3% which means out of every Rs 100 of deposits, a bank has to keep Rs 3 with RBI without getting any interest.
So far banks had the operational flexibility to maintain only 90% of the required amount without invoking penal action. That flexibility has been removed as the RBI looks to curtail banking system liquidity.
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The move comes after RBI Governor Sanjay Malhotra said at the October 7 monetary policy review that surplus liquidity in the banking system was expected to ease through natural factors over the remainder of the financial year. The RBI has not increased the overall CRR ratio through this notification. Instead, it has tightened the daily maintenance requirement.
The impact of the revised norm is expected to vary across banks depending on their liquidity positions and treasury management practices.
