| RBI/2012-13/402 Ref:DBOD.No.Ret.BC. 77/12.01.001/2012-13
January 29, 2013
All Scheduled Commercial Banks& Local Area Banks Dear Sir,
Bank Rate
As announced in the Third Quarter Review of Monetary Policy 2012-13, the Bank Rate stands adjusted by 25 basis points from 9.00 per cent to 8.75 per cent with effect from January 29, 2013.
2. All penal interest rates on shortfall in reserve requirements, which are specifically linked to the Bank Rate, also stand revised as indicated in Annex.
3. Please acknowledge receipt.
Yours faithfully
(Murli Radhakrishnan)
Chief General Manager
Encl: as above
Penal Interest Rates which are linked to the Bank Rate
|
Bank Rate
Cash Reserve Ratio
RBI/2012-13/401
Ref: DBOD.No.Ret. BC.76/12.01.001/2012-13
January 29, 2013
All Scheduled Commercial Banks& Local Area Banks
(Excluding Regional Rural Banks)
Dear Sir,
Maintenance of Cash Reserve Ratio (CRR)
Please refer to our Circular DBOD.No.Ret.BC.52/12.01.001/2012-13 dated October 30, 2012 on the captioned subject.2. As set out in the Reserve Bank's Press Release 2012-2013/1267 dated January 29, 2013, it has been decided to reduce the Cash Reserve Ratio (CRR) of Scheduled Commercial Banks by 25 basis points from 4.25 per cent to 4.00 per cent of their Net Demand and Time Liabilities (NDTL) with effect from the fortnight beginning February 09, 2013. The Local Area Banks shall also maintain CRR at 3.00 per cent of its net demand and time liabilities upto February 08, 2013 and 4.00 per cent of its net demand and time liabilities from the fortnight beginning from February 09, 2013.
3. The copies of the relative notifications DBOD.No.Ret.BC.75 /12.01.001/2012-13 and DBOD.No.Ret.BC.79 /12.01.001/2012-13 dated January 29, 2013 are enclosed.
4. Please acknowledge receipt.
Yours faithfully
(Murli Radhakrishnan)
Chief General Manager
Encls: as above
DBOD.No.Ret.BC.75/12.01.001/2012-13
January 29, 2013
Notification
In exercise of the powers conferred under the sub-section (1) of Section 42 of the Reserve Bank Act, 1934 and in partial modification of the earlier notification DBOD.No. Ret.BC.51/12.01.001/2012-13 dated October 30, 2012, the Reserve Bank of India hereby notifies that the average Cash Reserve Ratio (CRR) required to be maintained by every Scheduled Commercial Bank shall be 4.00 per cent of its net demand and time liabilities from the fortnight beginning February 09, 2013.
(B. Mahapatra)
Executive Director
Executive Director
DBOD.No.Ret.BC.79/12.01.001/2012-13
January 29, 2013
Notification
In exercise of the powers conferred under sub-section (1) of Section 18 of the Banking Regulation Act, 1949 (10 of 1949), the Reserve Bank of India hereby notifies that the Cash Reserve Ratio (CRR) required to be maintained by every banking company, not being a scheduled bank, shall be 3.00 per cent of its net demand and time liabilities upto February 08, 2013 and 4.00 per cent of its net demand and time liabilities from the fortnight beginning from February 09, 2013.
(B. Mahapatra)
Executive Director
Executive Director
RBI Announces Reduction in the CRR
RBI has been decided to:
- reduce the cash reserve ratio (CRR) of scheduled banks by 75 basis points from 5.5 per cent to 4.75 per cent of their net demand and time liabilities (NDTL) effective the fortnight beginning March 10, 2012.
In order to mitigate tight liquidity conditions, the cash reserve ratio was reduced by 50 basis points in the Third Quarter Review (TQR) of January 2012, injecting primary liquidity of `315 billion into the banking system. The Reserve Bank also continued with the open market operations (OMOs), injecting primary liquidity of over `1,245 billion this financial year so far, of which `528 billion was injected after the TQR.
Despite these measures, the liquidity deficit has remained large on account of both structural and frictional factors. This was reflected in the net average borrowing under the Reserve Bank's liquidity adjustment facility (LAF) rising from an average of `1,292 billion in January 2012 to `1,405 billion in February. Net injection of liquidity through LAF rose to a peak of `1,917 billion on March 1, 2012, though subsequently it declined to `1,273 billion on March 7, 2012.
Further, the liquidity deficit is expected to increase significantly during the second week of March due to advance tax outflows and the usual frontloading of cash balances by banks with the Reserve Bank. Thus, the overall deficit in the system persists above the comfort level of the Reserve Bank. Accordingly, it has been decided to inject permanent primary liquidity into the system by reducing the CRR so as to ensure smooth flow of credit to productive sectors of the economy.
As already announced, the Reserve Bank will provide its assessment of the macroeconomic situation in its Mid-Quarter Review to be published on March 15, 2012.
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