Discontinuance of Incremental Cash Reserve Ratio (I-CRR)

Based on an evaluation of the liquidity conditions in July and August, the Reserve Bank of India had issued a circular, bearing reference number RBI/2023-24/52 Dor.Ret.Rec.29/12.01.001/2023-24 on 10 August, 2023, instructing all Scheduled Commercial Banks, Regional Rural Banks, Scheduled Primary (Urban) Co-operative Banks, and Scheduled State Co-operative Banks to maintain an additional average daily balance over and above the average daily balance required to be maintained under sub-section (1) of Section 42.

Banks were also instructed to ensure that the minimum amount of the additional average daily balance shall not fall lower than 10% of the increase in net demand and time liabilities from 19 May, 2023 to July 28, 2023.

However, after careful consideration, it has been determined that the incremental CRR (I-CRR) will be discontinued gradually. This approach aims to prevent sudden disruptions to system liquidity and ensure that money markets operate smoothly.

The funds will be released according to the following schedule:


Amount to be released

September 09, 2023

25 per cent of the I-CRR maintained

September 23, 2023

25 per cent of the I-CRR maintained

October 07, 2023

50 per cent of the I-CRR maintained