DBOD.No.BC. 120 /12.01.001/2000-01

May 12, 2001
Vaishakha 22,1923 (saka)

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 77/12.01.001/2000-01 dated February 16,2001 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 be 7.50 per cent effective from the fortnight beginning May 19, 2001.

(K.L.Khetarpaul)
Executive Director

DBOD.No.BC. 122 /12.01.001/2000-01

May 12, 2001
Vaishakha 22,1923 (saka)

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 207 /07.01.279/2000-01 dated May 12, 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 8.0 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 from 8.0 per cent to 7.50 per cent effective from the fortnight beginning May 19, 2001.

4.A copy of the relative notification DBOD No.BC 121/12.01.001/2000-01 dated May 12, 2001 is enclosed.

5.It may be reiterated that in view of the multiple prescriptions on different categories of liabilities including zero prescription of CRR on certain liabilities, as stipulated under the Act, effective CRR maintained by Scheduled Commercial Banks on total Demand and Time Liabilities should not be less than 3.0 per cent.

6.Please acknowledge receipt.

Yours faithfully,

(R.C.Mittal)
General Manager.

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