RBI/2004-05/174
RPCD.RF.BC.No.32/07.02.05/2004-05
September 11, 2004
Bhadra 20, 1926(Saka)
All Scheduled State Co-operative Banks/Regional
Rural Banks
Section 42(1) of the Reserve Bank
of India Act, 1934 – Maintenance of Cash Reserve Ratio(CRR)
Please refer to our circulars RPCD.No.RF.BC49/07.02.05/2001-02
dated December 31, 2001 (addressed to all Scheduled State Co-operative Banks),
RPCD.No.RF.BC50/07.02.05/2001-02 dated December 31, 2001 (addressed to all Regional
Rural Banks) and RPCD.RF.BC.No.91/07.02.05/2002-03 dated April 29, 2003 on the
above subject. On review of current liquidity conditions, it has been decided
to increase CRR of Scheduled State Co-operative Banks and Regional Rural Banks
by one – half of one percentage point of their Net Demand and Time Liabilities
(NDTL) in two stages, effective from fortnights as indicated below:
|
Effective date (i.e. the
fortnight beginning from)
|
CRR on net demand and
time liabilities (per cent)
|
|
September 18, 2004
|
4.75
|
|
October 2, 2004
|
5.00
|
However, the effective CRR maintained
by Scheduled State Co-operative Banks and Regional Rural Banks on total demand
and time liabilities shall not be less than 3.00 per cent, as stipulated under
the Reserve Bank of India Act, 1934.
2. A copy of the relative
Notification RPCD.No.172/07.02.05/2004-05 dated September 11,
2004 is enclosed.
3.Interest on Cash
Balances maintained with Reserve Bank of India under Cash Reserve Ratio
At present, all Scheduled State
Co-operative Banks and Regional Rural Banks are paid interest at the Bank Rate
on eligible cash balances maintained with Reserve Bank of India under proviso
to Section 42(1) and 42(1A) of the Reserve Bank of India Act, 1934. It has now
been decided that with effect from fortnight beginning September 18, 2004, the
Scheduled State Co-operative Banks and Regional Rural Banks will be paid interest
at the rate of 3.5 per cent per annum on eligible cash balances maintained with
the Reserve Bank of India under CRR requirement.
4.Please acknowledge receipt
to our concerned Regional Office.
Yours faithfully,
(P.K. Bahinipati)
General Manager
Encl: One
RPCD.No. 172/07.02.05/2004-05
September 11, 2004
N O T I F I C A T I O N
In exercise of the powers conferred
by the Proviso to sub-Section (1) of Section 42 of the Reserve Bank of India
Act, 1934 (2 of 1934) and in supersession of its Notification RPCD.No.973/07.02.05/2002-03
dated April 29, 2003, the Reserve Bank of India hereby specifies that the average
Cash Reserve Ratio (CRR) required to be maintained by Scheduled State Co-operative
Banks and Regional Rural Banks shall, from effective dates mentioned below,
be at the percentage points as indicated thereagainst.
|
Effective date (i.e. the
fortnight beginning from)
|
CRR on net demand and
time liabilities (per cent)
|
|
September 18, 2004
|
4.75
|
|
October 2, 2004
|
5.00
|
However, the effective CRR maintained
by Scheduled State Co-operative Banks and Regional Rural Banks on total demand
and time liabilities shall not be less than 3.00 per cent, as stipulated under
the Act, ibid.
(Usha Thorat)
Executive Director
|