CRR, SLR meaning

CRR – SLR and Liquidity
Management
Lecture and Presentation
By
P. R. Kulkarni,
Managing Director,
Fluent Consultants Pvt. Ltd.,
Pune.
P. R. Kulkarni, Managing Director, Fluent
Consultants Pvt. Ltd., Pune

1

Regulatory powers of RBI

RBI gets regulatory powers under
Banking Regulation Act,1949
RBI has some powers under the
Reserve Bank of India Act,1935

Contd. ….
P. R. Kulkarni, Managing Director, Fluent
Consultants Pvt. Ltd., Pune

2

Regulatory powers of RBI

RBI has some powers under other
Acts related to Foreign Exchange,
Deposit Insurance etc.
RBI can issue prudential and operational guidelines using powers under these various Acts
P. R. Kulkarni, Managing Director, Fluent
Consultants Pvt. Ltd., Pune

3

Powers of RBI about
CRR – Non-scheduled banks
CRR for non-scheduled Co-operative
Banks - u/s 18 of the Banking
Regulation Act, 1949 – 3% of DTL as on the last Friday of the second preceding fortnight.

P. R. Kulkarni, Managing Director, Fluent
Consultants Pvt. Ltd., Pune

4

Powers of RBI about
CRR – Scheduled banks
CRR for scheduled Co-operative
Banks - u/s 42 of the Reserve Bank of
India Act,1934 – minimum 3% and maximum 15% of DTL as on the last
Friday of the second preceding fortnight prior to 1st April, 2007.
Thereafter, both ceilings are removed.
Now RBI can prescribe the %.
P. R. Kulkarni, Managing Director, Fluent
Consultants Pvt. Ltd., Pune

5

CRR as on ….
As a measure of simplification and better cash management by the banks, a lag of two weeks has been introduced in maintenance of stipulated CRR by the banks.

P. R. Kulkarni, Managing Director, Fluent
Consultants Pvt. Ltd., Pune

6

CRR minimum daily
In order to provide flexibility to banks and enable them to an optimum strategy of holding reserves depending on their intra period cash flow, banks are allowed to maintain on average daily balance, a minimum of 70 % of the prescribed CRR balance of their