RBI raises banks’ average CRR requirement
The Reserve Bank of India (RBI) has increased the minimum daily cash reserve ratio (CRR) maintenance requirement for banks from 90% to 99%, effective mid-October 2026. This measure aims to reduce surplus liquidity in the banking system as the central bank adopts a calibrated tightening approach. RBI announced the change in a notification on Friday, with banks required to maintain a minimum daily balance of 99% of the CRR from the fortnight beginning October 16.
The current CRR ratio stands at 3%, meaning banks must keep Rs 3 on reserve for every Rs 100 of deposits. Previously, banks had operational flexibility to maintain 90% of the CRR requirement for half of each reporting fortnight, with the remaining half allowing for 110%. This new measure eliminates that flexibility, requiring banks to maintain an average of 100% CRR throughout the fortnight.
Gopal Tripathi, head of treasury and capital markets at Jana Small Finance Bank, noted that the change will impose some operational adjustments on banks but is not expected to bring about significant alterations to their overall operations.
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