RBI/2006-2007/348
Ref: UBD (PCB).No./7/12.03.000/2006-07 April
25, 2007 The Chief Executive Officers of
All Scheduled Primary (Urban)
Co-operative Banks Dear Sir, Section 42(1) of
Reserve Bank of India Act, 1934-
Maintenance of Cash Reserve Ratio (CRR)
Please refer to our Circulars RBI/2006-2007/271
UBD(PCB)No3/12.03.000/2006-07 dated March 01, 2007 and RBI/2006-2007/311
UBD (PCB) Cir. No.5/12.03.000/2006-07 dated April 05, 2007 on the captioned
subject. Government of India in their Extraordinary Gazette notification No.S.O.337
(E) dated March 9, 2007 have notified April 01, 2007 as the date on which all
the provisions of Section 3 of the Reserve Bank of India (Amendment) Act, 2006
shall come into force. Consequent upon the provisions of Section 3 of the Reserve
Bank of India (Amendment) Act 2006 coming into force, the amendment carried out
to sub-section (1) of Section 42 of the Reserve Bank of India Act, 1934 has been
brought into force with effect from April 01, 2007. Accordingly, the statutory
minimum CRR requirement of 3 per cent of total demand and time liabilities no
longer exists with effect from the said notified date. The Reserve Bank of India,
having regard to the needs of securing the monetary stability in the country,
may from time to time prescribe the CRR for Scheduled Primary (Urban) Co-operative
Banks without any floor and ceiling rate. 2. In exercise of the powers conferred
on the Reserve Bank of India, it has been decided to continue the status quo on
the rate of CRR to be maintained by Scheduled Primary (Urban) Co-operative Banks
and the extant exemptions which will be operative till further changes are notified.
Accordingly, Scheduled Primary (Urban) Co-operative Banks shall continue to maintain
CRR on their total demand and time liabilities, subject to the exemptions as indicated
in our circular RBI/2006-2007/347
UBD (PCB) Cir.No./6 /12.03.000/2006-07 dated April 25, 2007 from the fortnights
as detailed below.
| Effective
Date
(i.e., the fortnight beginning from) |
CRR on net demand
and time liabilities
(per cent) | | April
14, 2007 | 6.25 |
| April
28, 2007 | 6.50 |
3.
Further, in view of Section 3 of the Reserve Bank of India (Amendment) Act, 2006
coming into force, sub-Section (1B) of Section 42 of the Reserve Bank of India
Act, 1934 stands omitted with effect from April 01, 2007. Consistent with the
amendment and in partial modification of our circulars RBI/2006-2007/271
UBD (PCB) No. 3 / 12.03.000/2006-07 dated March 01, 2007 and RBI/2006-2007/311
UBD(PCB)No.5/ 12.03.000/2006-07 dated April 05, 2007, it has been decided
that with effect from the fortnight beginning March 31, 2007, the Reserve Bank
of India will not be paying any interest on the CRR balances maintained by Scheduled
Primary (Urban) Co-operative Banks. 4. A copy of the relative
notification UBD
UBD(PCB)NO/7/ 12.03.000/2006-07 dated April 24, 2007 is enclosed. 5.
Please acknowledge receipt.
Yours faithfully
(N.S.Viswanathan)
Chief
General Manager in-Charge |