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DBOD.No.BC.5/12.01.001/97-98 January 16, 1998 All Scheduled Commercial
Banks (excluding Regional Rural
Banks) Dear Sir, Section 42(1) of the Reserve
Bank of India act, 1934 - increase in cash reserve ratio (crr) Please refer to Deputy
Governor's Circular No. MPD/BC/171/07.01.279/97-98 dated January 16, 1998. On
a review of the current monetary and foreign exchange situation, the measures
already taken by the Reserve Bank of India in this regard and the recent
international developments, following change is effected in the prescription
relating to maintenance of CRR: 2. Increase in Cash Reserve
Ratio (CRR): It has been decided to increase
the Cash Reserve Ratio (CRR) to be maintained by Scheduled Commercial Banks
(excluding Regional Rural Banks) by one half of one percentage point from
10.00 per cent to 10.50 per cent with effect from the fortnight beginning
January 17, 1998. 3. It may be mentioned that all
other prescriptions regarding maintenance of incremental Cash Reserve Ratio
under Section 42(1A) of the Reserve Bank of India Act, 1934 would continue. 4. A copy of the relative
notification DBOD. No. BC. 4/12.01.001/97-98 dated January 16, 1998 is
enclosed. 5. We may reiterate that in
view of the multiple prescriptions on different categories of liabilities,
including zero prescription 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. Yours faithfully (D.V. Jhaveri) General Manager |