RBI/2006-2007/339
RPCD.CO.RF.BC.No.75/07.02.01/2006-07 April 24,
2007 All Scheduled
State 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/2006-2007/276
RPCD.RF.BC.54/07.02.01/ 2006-07 dated March 02, 2007 and RBI/2006-07/307
RPCD.CO.RF.BC.No.64/ 07.02.01/2006-07 dated April 04, 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 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 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 State 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
State Co-operative Banks and the extant exemptions which will be operative till
further changes are notified. Accordingly, Scheduled State Co-operative Banks
shall continue to maintain CRR on their total demand and time liabilities, subject
to the exemptions as indicated in our circular RPCD.CO.RF.BC.No.77/07.02.01/2006-07
dated April 24, 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/2006-2007/276
RPCD.CO.RF.BC.54/07.02.01/2006-07 dated March 02, 2007 and RBI/2006-07/307 RPCD.CO.RF.BC.No.64/07.02.01/2006-07
dated April 4, 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 State Co-operative Banks. 4.
A copy of the relative notification RPCD.CO.RF.BC.No.74/07.02.01/2006-07
dated April 24, 2007 is enclosed. 5.
Please acknowledge receipt to our Regional Office concerned. Yours
faithfully,
(K.Bhattacharya)
General Manager
|