RBI tweaks CRR norms for some local area banks in line with commercial banks
This story was originally published at 23:45 IST on 11 September 2026
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NEW DELHI – The Reserve Bank of India Friday notified amended cash reserve ratio requirements for scheduled local area banks, with the guidelines now in line with those for scheduled commercial banks. It also made a distinction between scheduled and non-scheduled local area banks in this regard, with the non-scheduled lenders allowed to retain earlier norms. The new norms are effective immediately.
The regulator added sections on the maintenance of incremental CRR that scheduled local area lenders will have to follow. Non-scheduled banks can maintain the cash reserve ratio with themselves or the RBI while scheduled local area banks now have to maintain it with the central bank only.
However, the RBI also said scheduled banks would have to maintain a daily CRR of not less than 90% of the required liquidity buffer, another norm on a par with commercial banks. Non-scheduled banks will have to maintain the full requirement of 3% of their net demand and time liabilities daily.
The calculation of net demand and time liabilities and exemptions thereof for computation of regulatory requirements was also tweaked. The exemptions for scheduled local area banks have been changed to bring them also on a par with commercial banks. While the exemptions have increased, the managements of scheduled local area banks can now be personally penalised for any violation of cash reserve norms. The bank concerned can also be barred from taking fresh deposits, as per the notification. End
Reported by Aaryan Khanna
Edited by Rajeev Pai
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