Reduction in Cash Reserve Ratio Section 42(1) of the Reserve Bank of India Act,1934

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Reduction in Cash Reserve Ratio
Section 42(1) of the Reserve Bank of India Act,1934

RESERVE BANK OF INDIA
CENTRAL OFFICE
Department of Banking Operations & Development
WORLD TRADE CENTRE - I, CUFFE PARADE, COLABA
MUMBAI - 400 005.

DBOD No.BC . 77 /12.01.001/2000-01

February 16, 2001
Magha 27, 1922

NOTIFICATION
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 DBOD No.BC 07/12.01.001/2000-01 dated July 21, 2000 the Reserve Bank of India hereby specifies that the average Cash Reserve Ratio (CRR) required to be maintained by Scheduled Commercial Banks (excluding 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)
February 24, 2001	8.25
March 10, 2001	8.00

(P.R.Gopala Rao)
Executive Director.

DBOD No.BC. 78 /12.01.001/2000-01

February 16, 2001
Magha 27, 1922

To All Scheduled Commercial Banks
(Excluding Regional Rural Banks)

Dear Sir,

Section 42(1) of the Reserve Bank of India Act,1934 -
Reduction in Cash Reserve Ratio

Please refer to the Circular No.MPD BC 203/07.01.279/2000-2001 dated February 16, 2001 from our Monetary Policy Department on the above subject.

2. Scheduled Commercial Banks { excluding Regional Rural Banks (RRBs) } are, at present, required to maintain with the Reserve Bank of India a Cash Reserve Ratio (CRR) of 8.50 per cent of the Net Demand and Time Liabilities (NDTL) (excluding liabilities subject to zero CRR prescriptions) under Section 42(1) of the Reserve Bank of India Act,1934.

3. It has now been decided to reduce CRR by one half of one percentage point in two stages by 0.25 percentage point each effective from fortnights as indicated below.

Effective date (i.e. the fortnight beginning from)	CRR on net demand and time liabilities (per cent)
February 24, 2001	8.25
March 10, 2001	8.00

4. A copy of the relative notification DBOD No.BC. 77 /12.01.001/2000-01 dated February 16, 2001 is enclosed.

5. We may reiterate that in view of the multiple prescriptions on different categories of liabilities including zero prescriptions of CRR on certain liabilities, as stipulated under the law, effective CRR maintained by Scheduled Commercial Banks on total Net Demand and Time Liabilities should not be less than 3 per cent.

6. Please acknowledge receipt.

Yours faithfully,

( R.C.Mittal )
General Manager