This document provides a summary of the Reserve Bank of India's regulations regarding the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) that banks in India are required to maintain. [1] It outlines the current CRR requirement of 4.5% of Net Demand and Time Liabilities (NDTL) that banks must maintain on average with the RBI. [2] It also describes what liabilities are included in the calculation of NDTL, such as demand deposits and time deposits, and what liabilities are excluded, such as borrowings from the RBI. [3] The document provides guidance to banks on complying with CRR and SLR requirements.
The document discusses various monetary policy instruments used by the Reserve Bank of India to regulate money supply and credit conditions. It explains key tools like cash reserve ratio (CRR), statutory liquidity ratio (SLR), refinance facilities, open market operations (OMO), liquidity adjustment facility (LAF), market stabilization scheme (MSS), repo rate, reverse repo rate, and bank rate. It provides details on how these tools work and their impact on the economy, interest rates, exchange rates, inflation, and common people.
The Reserve Bank of India (RBI) is India's central bank. It was established in 1935 under the RBI Act and was nationalized in 1949. RBI regulates monetary policy and banking operations in India through various quantitative and qualitative methods. It acts as a bank for the government and commercial banks and manages foreign exchange reserves and monetary policy tools like bank rate, open market operations, and cash reserve ratio to regulate money supply.
The document discusses the Reserve Bank of India (RBI), which serves as India's central bank, and its role in regulating commercial banks in India. It outlines the history and organizational structure of the RBI, its key functions including monetary policy, banking supervision, and currency management. The document also describes the different types of commercial banks that operate in India, including public sector banks, private sector banks, and foreign banks.
Apart from its Monetary policies to combat Inflation, Recession and like issues; Central Bank also has a significant role to play in the development of a country. This brief presentation highlights the roles India's Central Bank - the Reserve Bank of India has to play in the country's development.
The Reserve Bank of India (RBI) is the central bank of India. It was established in 1935 and nationalized in 1949. RBI has several key functions including being the sole issuer of banknotes, acting as the government's banker and adviser, regulating commercial banks, controlling the country's foreign exchange and monetary policy, and promoting financial sector development. RBI oversees India's banking and financial system through supervisory and developmental roles.
The document provides information about the roles and functions of the Reserve Bank of India (RBI). It discusses RBI's role as a monetary authority, banker's bank, money regulator, issuer of currency and licenses. It outlines the powers of RBI in controlling money supply through various quantitative measures like cash reserve ratio (CRR), statutory liquidity ratio (SLR), repo rate, and reverse repo rate. Examples are given of how CRR, SLR and repo rate work. Past and recent governors of RBI are also mentioned.
The money market can be defined as a market for short-term funds with maturities ranging from overnight to one year. It plays a central role in monetary policy transmission and providing a link between monetary policy, financial markets, and the real economy. The Indian money market has both an organized and unorganized structure, with the organized market consisting of entities like the RBI and scheduled commercial banks, and the unorganized market comprising informal lenders. Key components of the Indian money market include markets for products like treasury bills, commercial paper, certificates of deposit, and various inter-bank markets. The RBI uses tools like open market operations, cash reserve ratio, and repo/reverse repo rates to regulate the money market and implement monetary
Reserve bank of_india___commercial_banks123shynapuri
The document discusses the role and functions of the Reserve Bank of India (RBI) as the central bank and regulator of the financial system in India. It outlines that RBI regulates commercial banks, controls money supply, acts as a banker to the central and state governments, promotes a sound banking system, and uses various techniques like bank rate, reserve ratios, and open market operations to influence monetary policy and credit growth. The objective of RBI's monetary policy is to accelerate economic development with reasonable price stability.
The document discusses various monetary policy instruments used by the Reserve Bank of India to regulate money supply and credit conditions. It explains key tools like cash reserve ratio (CRR), statutory liquidity ratio (SLR), refinance facilities, open market operations (OMO), liquidity adjustment facility (LAF), market stabilization scheme (MSS), repo rate, reverse repo rate, and bank rate. It provides details on how these tools work and their impact on the economy, interest rates, exchange rates, inflation, and common people.
The Reserve Bank of India (RBI) is India's central bank. It was established in 1935 under the RBI Act and was nationalized in 1949. RBI regulates monetary policy and banking operations in India through various quantitative and qualitative methods. It acts as a bank for the government and commercial banks and manages foreign exchange reserves and monetary policy tools like bank rate, open market operations, and cash reserve ratio to regulate money supply.
The document discusses the Reserve Bank of India (RBI), which serves as India's central bank, and its role in regulating commercial banks in India. It outlines the history and organizational structure of the RBI, its key functions including monetary policy, banking supervision, and currency management. The document also describes the different types of commercial banks that operate in India, including public sector banks, private sector banks, and foreign banks.
Apart from its Monetary policies to combat Inflation, Recession and like issues; Central Bank also has a significant role to play in the development of a country. This brief presentation highlights the roles India's Central Bank - the Reserve Bank of India has to play in the country's development.
The Reserve Bank of India (RBI) is the central bank of India. It was established in 1935 and nationalized in 1949. RBI has several key functions including being the sole issuer of banknotes, acting as the government's banker and adviser, regulating commercial banks, controlling the country's foreign exchange and monetary policy, and promoting financial sector development. RBI oversees India's banking and financial system through supervisory and developmental roles.
The document provides information about the roles and functions of the Reserve Bank of India (RBI). It discusses RBI's role as a monetary authority, banker's bank, money regulator, issuer of currency and licenses. It outlines the powers of RBI in controlling money supply through various quantitative measures like cash reserve ratio (CRR), statutory liquidity ratio (SLR), repo rate, and reverse repo rate. Examples are given of how CRR, SLR and repo rate work. Past and recent governors of RBI are also mentioned.
The money market can be defined as a market for short-term funds with maturities ranging from overnight to one year. It plays a central role in monetary policy transmission and providing a link between monetary policy, financial markets, and the real economy. The Indian money market has both an organized and unorganized structure, with the organized market consisting of entities like the RBI and scheduled commercial banks, and the unorganized market comprising informal lenders. Key components of the Indian money market include markets for products like treasury bills, commercial paper, certificates of deposit, and various inter-bank markets. The RBI uses tools like open market operations, cash reserve ratio, and repo/reverse repo rates to regulate the money market and implement monetary
Reserve bank of_india___commercial_banks123shynapuri
The document discusses the role and functions of the Reserve Bank of India (RBI) as the central bank and regulator of the financial system in India. It outlines that RBI regulates commercial banks, controls money supply, acts as a banker to the central and state governments, promotes a sound banking system, and uses various techniques like bank rate, reserve ratios, and open market operations to influence monetary policy and credit growth. The objective of RBI's monetary policy is to accelerate economic development with reasonable price stability.
The document summarizes the developmental roles of the Reserve Bank of India (RBI) in the banking and non-banking sectors. It discusses how RBI promotes savings, ensures adequate credit flows to neglected sectors, and improves fund allocation to underdeveloped regions. It also outlines how RBI aids the development of the financial system through institutions that cater to diverse economic sectors. RBI provides special attention to agriculture credit and industrial finance. It also regulates and supervises banking and non-banking institutions and controls banks using various instruments.
The Reserve Bank of India is India's Central Banking Institution, which controls the Monetary Policy of the Indian Rupee. It commenced its operations on 1 April 1935 during the British Rule in accordance with the provisions of the Reserve Bank of India Act, 1934. The original share capital was divided into shares of 100 each fully paid, which were initially owned entirely by private shareholders. Following India's independence on 15 - August - 1947, the RBI was nationalised in the year of 1 January 1949. In this PPT it covers all the RBI information.
The document provides an overview of the Reserve Bank of India's (RBI) role as a regulator. It discusses the RBI's role in regulating the banking system, payment and settlement systems, credit markets, foreign exchange, and the overall financial system. The RBI oversees commercial banks, cooperative banks, non-banking financial companies, and more. It uses tools like on-site inspections, reporting requirements, and thematic reviews to regulate these entities and promote stability and development across India's financial sector. The RBI also works to address ongoing challenges for different types of financial institutions.
Role of RBI in growth of Indian economyAman Mishra
The document discusses the role of the Reserve Bank of India (RBI) in the growth of the Indian economy. It outlines the RBI's evolving functions over time, including as the monetary authority, issuer of currency, banker and financial advisor to the government, banker to banks, and regulator of the banking and financial system. The RBI works to maintain price stability, ensure adequate credit flows, promote financial stability, and support economic growth, while operating under various Acts and with organizational structures that include regional offices and local boards.
The document discusses the evolving role of the Reserve Bank of India (RBI). Some key points:
1) While RBI was established in 1934, it has adapted to changing economic realities over time, gaining some autonomy over monetary management and financial regulation.
2) De jure, RBI does not have full autonomy according to recent central banking trends. However, de facto it has gradually gained more autonomy, especially since 1991 reforms in areas like conducting monetary policy.
3) RBI's monetary policy objectives have evolved to maintaining price stability while ensuring adequate credit flow for growth. More recently, macroeconomic and financial stability have also become important considerations.
Role of RBI in Control of Credit - Economics Project Class 12 (2019-20 )ShivamSingh1247
This is Class 12 Economics Project as per the CBSE Guidelines ( 2019-20)
Download This Project From Here : https://drive.google.com/file/d/1EJZakkGzp5ubvAIYpShMQRB26LVsXOXx/view?usp=drivesdk
Topic : Role of RBI in Control of Credit
➡️ Reserve Bank of India - Histroy
➡️ Reserve Bank of India - Introduction
➡️ Structure of Reserve Bank of India
➡️ Functions of Reserve Bank of India
➡️ Demonetisation
➡️ Methods of Credit Control
➡️ Need of Credit Control
➡️ Limitations of Credit Control
➡️ Current Rates ( As on 14 Dec 2019 )
➡️ OBJECTIVE
➡️ CONCLUSION
➡️ BIBILIOGRAPHY
The Reserve Bank of India (RBI) is the central bank of India and was established in 1935. It controls inflation and deflation in India through various monetary policy tools. RBI aims to maintain price stability in the economy while ensuring adequate credit in the system. Its key functions include regulating the country's money supply, managing foreign exchange, and acting as the government's bank. RBI can combat inflation through measures like increasing policy rates and reserve requirements for banks, and tackle deflation by reducing rates and stimulating demand and investment.
Just sharing my efforts makes me feel happy and self-satisfied. Feel free to use my works as your project work at school.
Contact me at @ashmitg132@gmail.com
The Reserve Bank of India is the central bank of India established in 1935. It regulates banking, manages currency and monetary policy in India. It acts as a bank for the government and regulates commercial banks. It issues currency, manages foreign exchange reserves, implements monetary policy tools like repo rate, CRR, and SLR to regulate inflation and control money supply. It also oversees functions like licensing banks, inspecting banks, and managing clearing houses.
Understanding the Reserve Bank Of Indiakiran kumar
The Reserve Bank of India (RBI) is the central bank of India established in 1935 in Kolkata. Some key roles and responsibilities of RBI include acting as the banker to the central and state governments in India, regulating the country's banking and financial system, managing the country's foreign exchange and gold reserves, acting as a lender of last resort to banks, and formulating and implementing the country's monetary policy to control inflation and ensure financial stability. RBI oversees various functions including currency issue, development initiatives, and clearing house operations across major cities. It regulates commercial banks through various policies related to licensing, management, branch expansion, and inspections.
The Reserve Bank of India (RBI) is the central bank of India established in 1935. It regulates banking, manages currency and monetary policy in India. Key functions of RBI include issuing currency, acting as banker and lender of last resort to commercial banks, managing foreign exchange reserves, and regulating banking sectors through various policy tools like repo rate, cash reserve ratio, and statutory liquidity ratio. RBI aims to maintain price stability and adequate credit flow in the economy.
The Reserve Bank of India (RBI) performs several key monetary and non-monetary functions:
As the country's central bank, the RBI formulates and implements monetary policy, ensures an adequate supply of money, and monitors credit to productive sectors. It also designs, prints, and distributes currency. Additionally, the RBI acts as the government's banker, facilitates inter-bank transactions, regulates other banks, collects economic statistics, manages foreign exchange reserves, and promotes development through banking initiatives. One of its major tools for controlling the money supply is credit control.
The document discusses Reserve Bank of India (RBI) monetary policies and whether they are suitable for growth of the Indian economy. It outlines RBI's objectives of monetary policy, the instruments it uses including bank rate, open market operations, cash reserve ratio, and statutory liquidity ratio. It also discusses how these tools are used in inflationary versus recessionary situations and highlights of monetary policy in 2011-2012, including increasing key rates. It notes limitations of monetary policy include time lags, difficulties in forecasting, and an underdeveloped money and capital market in India.
The document summarizes the functions of the central bank of India, the Reserve Bank of India (RBI). The RBI was established in 1935 and nationalized after independence. Its key functions include issuing currency, acting as the government's banker and debt manager, being the banker to commercial banks, and using credit control tools to influence monetary policy goals like price stability. The RBI also performs promotional functions like developing the financial system and agriculture/industrial sectors. It supervises the banking system through activities like licensing banks and inspecting them. The document also briefly discusses the repo and reverse repo rates used as monetary policy tools.
The document provides an overview of the Reserve Bank of India (RBI), including its history, functions, and monetary policy tools. It establishes that the RBI was established in 1935 and serves as India's central bank, regulating the country's banking system and controlling its money supply. The RBI engages in functions like managing foreign exchange, acting as a banker to the government and other banks, issuing currency, and pursuing developmental objectives through specialized programs. It aims to maintain price stability and manage inflation through various quantitative and qualitative monetary policy instruments.
Central Bank of India is one of the oldest and largest public sector banks in India, established in 1911. It has over 3,500 branches across 27 states and union territories. The bank plans to expand its branch network, hire more employees, leverage technology, and open representative offices overseas. Housing loans are the fastest growing segment in India, with various types of loans available like home purchase loans, home extension loans, and home equity loans. Central Bank of India offers various housing loan products and plans to introduce new customized retail banking products.
The Reserve Bank of India was formed to perform traditional central banking functions such as issuing bank notes, acting as banker to the government, regulating monetary policy, and being custodian of foreign exchange reserves. It ensures liquidity of banks, acts as lender of last resort, has powers over licensing and regulation of banks, and conducts both quantitative and selective credit control to influence the money supply. The RBI also plays promotional roles in agriculture, industry, and payments infrastructure development through various schemes and institutions.
The Reserve Bank of India is India's central banking institution, which controls the monetary policy of the Indian rupee. It commenced its operations on 1 April 1935 during the British Rule in accordance with the provisions of the Reserve Bank of India Act, 1934.
The Reserve Bank of India is the central bank of India established in 1935. It was initially privately owned but was nationalized in 1949. The RBI regulates monetary policy and the country's banking system to promote economic growth and stability. It controls credit and money supply through various tools like open market operations, bank rates, and reserve requirements. The RBI also acts as a bank, lender, and manager of foreign exchange for India.
Cash Reserve Ratio (CRR) requires scheduled commercial banks to maintain 4.75% of their total net demand and time liabilities as reserves with the RBI without interest to ensure liquidity and solvency. Statutory Liquidity Ratio (SLR) requires banks to maintain a minimum of 23% of their net demand and time liabilities as liquid assets such as cash, gold or approved government securities. Non-compliance with CRR and SLR requirements results in penal interest rates being charged to banks by the RBI. Together, CRR and SLR comprise the liquidity reserves that banks must maintain.
This document discusses managing the cost of funds, capital, and liquidity in banks. It covers key components of bank liabilities including capital, reserves and surplus, deposits, borrowings, and other liabilities. It explains the features of bank liabilities and components of the bank balance sheet. The document also discusses the cost of deposits/funds and how net demand and time liabilities (NDTL) are calculated. Finally, it provides details on the calculation of the marginal cost of funds based lending rate (MCLR), including the key components involved like marginal cost of funds, operating expenses, negative carry on CRR and SLR, and average return on net worth.
The document summarizes the developmental roles of the Reserve Bank of India (RBI) in the banking and non-banking sectors. It discusses how RBI promotes savings, ensures adequate credit flows to neglected sectors, and improves fund allocation to underdeveloped regions. It also outlines how RBI aids the development of the financial system through institutions that cater to diverse economic sectors. RBI provides special attention to agriculture credit and industrial finance. It also regulates and supervises banking and non-banking institutions and controls banks using various instruments.
The Reserve Bank of India is India's Central Banking Institution, which controls the Monetary Policy of the Indian Rupee. It commenced its operations on 1 April 1935 during the British Rule in accordance with the provisions of the Reserve Bank of India Act, 1934. The original share capital was divided into shares of 100 each fully paid, which were initially owned entirely by private shareholders. Following India's independence on 15 - August - 1947, the RBI was nationalised in the year of 1 January 1949. In this PPT it covers all the RBI information.
The document provides an overview of the Reserve Bank of India's (RBI) role as a regulator. It discusses the RBI's role in regulating the banking system, payment and settlement systems, credit markets, foreign exchange, and the overall financial system. The RBI oversees commercial banks, cooperative banks, non-banking financial companies, and more. It uses tools like on-site inspections, reporting requirements, and thematic reviews to regulate these entities and promote stability and development across India's financial sector. The RBI also works to address ongoing challenges for different types of financial institutions.
Role of RBI in growth of Indian economyAman Mishra
The document discusses the role of the Reserve Bank of India (RBI) in the growth of the Indian economy. It outlines the RBI's evolving functions over time, including as the monetary authority, issuer of currency, banker and financial advisor to the government, banker to banks, and regulator of the banking and financial system. The RBI works to maintain price stability, ensure adequate credit flows, promote financial stability, and support economic growth, while operating under various Acts and with organizational structures that include regional offices and local boards.
The document discusses the evolving role of the Reserve Bank of India (RBI). Some key points:
1) While RBI was established in 1934, it has adapted to changing economic realities over time, gaining some autonomy over monetary management and financial regulation.
2) De jure, RBI does not have full autonomy according to recent central banking trends. However, de facto it has gradually gained more autonomy, especially since 1991 reforms in areas like conducting monetary policy.
3) RBI's monetary policy objectives have evolved to maintaining price stability while ensuring adequate credit flow for growth. More recently, macroeconomic and financial stability have also become important considerations.
Role of RBI in Control of Credit - Economics Project Class 12 (2019-20 )ShivamSingh1247
This is Class 12 Economics Project as per the CBSE Guidelines ( 2019-20)
Download This Project From Here : https://drive.google.com/file/d/1EJZakkGzp5ubvAIYpShMQRB26LVsXOXx/view?usp=drivesdk
Topic : Role of RBI in Control of Credit
➡️ Reserve Bank of India - Histroy
➡️ Reserve Bank of India - Introduction
➡️ Structure of Reserve Bank of India
➡️ Functions of Reserve Bank of India
➡️ Demonetisation
➡️ Methods of Credit Control
➡️ Need of Credit Control
➡️ Limitations of Credit Control
➡️ Current Rates ( As on 14 Dec 2019 )
➡️ OBJECTIVE
➡️ CONCLUSION
➡️ BIBILIOGRAPHY
The Reserve Bank of India (RBI) is the central bank of India and was established in 1935. It controls inflation and deflation in India through various monetary policy tools. RBI aims to maintain price stability in the economy while ensuring adequate credit in the system. Its key functions include regulating the country's money supply, managing foreign exchange, and acting as the government's bank. RBI can combat inflation through measures like increasing policy rates and reserve requirements for banks, and tackle deflation by reducing rates and stimulating demand and investment.
Just sharing my efforts makes me feel happy and self-satisfied. Feel free to use my works as your project work at school.
Contact me at @ashmitg132@gmail.com
The Reserve Bank of India is the central bank of India established in 1935. It regulates banking, manages currency and monetary policy in India. It acts as a bank for the government and regulates commercial banks. It issues currency, manages foreign exchange reserves, implements monetary policy tools like repo rate, CRR, and SLR to regulate inflation and control money supply. It also oversees functions like licensing banks, inspecting banks, and managing clearing houses.
Understanding the Reserve Bank Of Indiakiran kumar
The Reserve Bank of India (RBI) is the central bank of India established in 1935 in Kolkata. Some key roles and responsibilities of RBI include acting as the banker to the central and state governments in India, regulating the country's banking and financial system, managing the country's foreign exchange and gold reserves, acting as a lender of last resort to banks, and formulating and implementing the country's monetary policy to control inflation and ensure financial stability. RBI oversees various functions including currency issue, development initiatives, and clearing house operations across major cities. It regulates commercial banks through various policies related to licensing, management, branch expansion, and inspections.
The Reserve Bank of India (RBI) is the central bank of India established in 1935. It regulates banking, manages currency and monetary policy in India. Key functions of RBI include issuing currency, acting as banker and lender of last resort to commercial banks, managing foreign exchange reserves, and regulating banking sectors through various policy tools like repo rate, cash reserve ratio, and statutory liquidity ratio. RBI aims to maintain price stability and adequate credit flow in the economy.
The Reserve Bank of India (RBI) performs several key monetary and non-monetary functions:
As the country's central bank, the RBI formulates and implements monetary policy, ensures an adequate supply of money, and monitors credit to productive sectors. It also designs, prints, and distributes currency. Additionally, the RBI acts as the government's banker, facilitates inter-bank transactions, regulates other banks, collects economic statistics, manages foreign exchange reserves, and promotes development through banking initiatives. One of its major tools for controlling the money supply is credit control.
The document discusses Reserve Bank of India (RBI) monetary policies and whether they are suitable for growth of the Indian economy. It outlines RBI's objectives of monetary policy, the instruments it uses including bank rate, open market operations, cash reserve ratio, and statutory liquidity ratio. It also discusses how these tools are used in inflationary versus recessionary situations and highlights of monetary policy in 2011-2012, including increasing key rates. It notes limitations of monetary policy include time lags, difficulties in forecasting, and an underdeveloped money and capital market in India.
The document summarizes the functions of the central bank of India, the Reserve Bank of India (RBI). The RBI was established in 1935 and nationalized after independence. Its key functions include issuing currency, acting as the government's banker and debt manager, being the banker to commercial banks, and using credit control tools to influence monetary policy goals like price stability. The RBI also performs promotional functions like developing the financial system and agriculture/industrial sectors. It supervises the banking system through activities like licensing banks and inspecting them. The document also briefly discusses the repo and reverse repo rates used as monetary policy tools.
The document provides an overview of the Reserve Bank of India (RBI), including its history, functions, and monetary policy tools. It establishes that the RBI was established in 1935 and serves as India's central bank, regulating the country's banking system and controlling its money supply. The RBI engages in functions like managing foreign exchange, acting as a banker to the government and other banks, issuing currency, and pursuing developmental objectives through specialized programs. It aims to maintain price stability and manage inflation through various quantitative and qualitative monetary policy instruments.
Central Bank of India is one of the oldest and largest public sector banks in India, established in 1911. It has over 3,500 branches across 27 states and union territories. The bank plans to expand its branch network, hire more employees, leverage technology, and open representative offices overseas. Housing loans are the fastest growing segment in India, with various types of loans available like home purchase loans, home extension loans, and home equity loans. Central Bank of India offers various housing loan products and plans to introduce new customized retail banking products.
The Reserve Bank of India was formed to perform traditional central banking functions such as issuing bank notes, acting as banker to the government, regulating monetary policy, and being custodian of foreign exchange reserves. It ensures liquidity of banks, acts as lender of last resort, has powers over licensing and regulation of banks, and conducts both quantitative and selective credit control to influence the money supply. The RBI also plays promotional roles in agriculture, industry, and payments infrastructure development through various schemes and institutions.
The Reserve Bank of India is India's central banking institution, which controls the monetary policy of the Indian rupee. It commenced its operations on 1 April 1935 during the British Rule in accordance with the provisions of the Reserve Bank of India Act, 1934.
The Reserve Bank of India is the central bank of India established in 1935. It was initially privately owned but was nationalized in 1949. The RBI regulates monetary policy and the country's banking system to promote economic growth and stability. It controls credit and money supply through various tools like open market operations, bank rates, and reserve requirements. The RBI also acts as a bank, lender, and manager of foreign exchange for India.
Cash Reserve Ratio (CRR) requires scheduled commercial banks to maintain 4.75% of their total net demand and time liabilities as reserves with the RBI without interest to ensure liquidity and solvency. Statutory Liquidity Ratio (SLR) requires banks to maintain a minimum of 23% of their net demand and time liabilities as liquid assets such as cash, gold or approved government securities. Non-compliance with CRR and SLR requirements results in penal interest rates being charged to banks by the RBI. Together, CRR and SLR comprise the liquidity reserves that banks must maintain.
This document discusses managing the cost of funds, capital, and liquidity in banks. It covers key components of bank liabilities including capital, reserves and surplus, deposits, borrowings, and other liabilities. It explains the features of bank liabilities and components of the bank balance sheet. The document also discusses the cost of deposits/funds and how net demand and time liabilities (NDTL) are calculated. Finally, it provides details on the calculation of the marginal cost of funds based lending rate (MCLR), including the key components involved like marginal cost of funds, operating expenses, negative carry on CRR and SLR, and average return on net worth.
The document discusses the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements for banks in India. It defines CRR as the minimum proportion of demand and time liabilities that scheduled commercial banks must maintain as reserves with the Reserve Bank of India. Similarly, SLR is the minimum level of liquid assets like cash, gold, and government securities that banks must hold as a percentage of their net demand and time liabilities. The document outlines the calculation processes for CRR and SLR, categories included and exempted from the ratios, and how the ratios provide RBI tools to control liquidity in the banking system. It also reviews how CRR and SLR have changed over time and perspectives
RBI GUIDELINES: GUIDELINES FOR COMPROMISE SETTLEMENT OF DUES OF BANKS AND FIN...GK Dutta
As you are aware, the Indian Banks’ Association (IBA) has been issuing guidelines to member institutions for taking up of cases for settlement through Lok Adalats. The position
was reviewed and it was observed that banks have not taken adequate advantage of the Lok Adalats for compromise settlement of their NPAs. There are certain advantages in using the forum of Lok Adalats by banks and financial institutions in compromise settlement of their NPAs. There are no court fees involved when fresh disputes are referred to it. It can take cognizance of any existing suit in the court as well as look into and adjudicate upon fresh disputes. If no settlement is arrived at, the parties can continue with court proceedings. Its decrees have legal status and are binding. It has, therefore, been decided that with a view to making increasing use of the forum of Lok
Adalats to settle banking disputes involving smaller amounts, banks and financial institutions should follow the following guidelines for implementation.
The document discusses requirements for bank audits according to the Bank Company Act of 1991 as amended in 2013. It states that auditors must report on the adequacy of internal controls, risks of fraud, and consolidation of subsidiary financials. Auditors must also immediately report any serious violations of law or risks of default to Bangladesh Bank. The document provides details on audit procedures for loans and advances, common mistakes made by banks, mandatory financial statement disclosures, and relevant Bangladesh Bank reporting requirements for banks.
1. CIBIL is India's first credit information bureau established by SBI and HDFC with 40% stake each to maintain credit histories and provide credit reports to members.
2. It collects and disseminates credit information on both individual and corporate borrowers from its members in the form of Commercial and Consumer Credit Information Reports.
3. RBI guidelines recommend diversified ownership of credit bureaus with no single entity owning more than 10% initially and 5% over time, which CIBIL has implemented.
Non-performing assets (NPAs) are loans that are in default or close to being in default. The document discusses NPAs in Indian banks, including what qualifies a loan as an NPA, how NPAs are classified and provisioned for, and reasons why loan accounts may become NPAs, including internal factors within banks and borrowers as well as external economic factors. Key points are that an asset is considered non-performing if interest or principal has been due for over 90 days, NPAs are classified as substandard, doubtful or loss, and banks must make provisions against NPAs which reduces their profits.
This document outlines revisions to the Corporate Debt Restructuring (CDR) system in India based on recommendations from a working group. Key points:
- The CDR system will have two categories for restructuring accounts classified as standard/sub-standard or doubtful.
- A high-level group chaired by the RBI deputy governor reviewed the CDR mechanism and recommended making it more efficient.
- The revised CDR framework aims to preserve viable corporates affected by internal/external factors through an orderly debt restructuring program.
This document provides notes to the accounts of Karnataka Bank Ltd. for the year ending 2010. It includes information on reconciliation of branch adjustments, prior period items, share issue expenses, employee benefits, segment reporting, related party transactions, accounting for taxes, impairment of assets, provisions and contingencies, and additional disclosures on risk exposures in derivatives and employee stock options as required by applicable accounting standards and RBI guidelines.
CIBIL is India's first credit information bureau, established by SBI and HDFC with 40% stakes each. It maintains a central database of borrower credit information collected from its member institutions. CIBIL provides credit information reports to members to assist with loan appraisals for both individual consumers and commercial/business borrowers. The RBI guidelines recommend diversified ownership of credit bureaus with no single entity owning more than 10% initially or 5% over time. Banks in India have also implemented Fair Practices Codes for debt collection as per RBI guidelines, which cover terms and conditions for loan applications, appraisals, and agreements to be fair and transparent to borrowers.
This document discusses universal banking in India. Universal banking combines commercial banking, investment banking, insurance, and other financial activities under one roof. In India, the Narsimham Committee Report and S.H. Khan Committee Report in 1998 advised consolidating the banking industry through mergers and integrating financial activities, suggesting universal banking. Some large domestic financial institutions in India have been permitted to become universal banks, such as ICICI in 2000. Universal banking allows for economies of scale, profitable diversification, better resource utilization, easy marketing using existing brand names, and one-stop shopping convenience for customers. However, it also presents challenges such as different regulatory requirements for banks versus other financial institutions, lack of expertise in long-term lending, and
The document provides information on Non-Banking Financial Companies (NBFCs) in India. It defines NBFCs as non-banking companies that are principally engaged in financial services like loans, acquisitions, leasing etc. NBFCs are regulated by the Reserve Bank of India and are categorized based on their activities. The key differences between banks and NBFCs are that NBFCs cannot accept demand deposits or issue cheques. The document also lists and describes various types of NBFCs registered with RBI.
This document discusses issues with regulations under the Foreign Exchange Management Act (FEMA) regarding how Non-Resident Indians (NRIs) can utilize funds remitted to India. It notes that while some regulations aim to manage foreign currency flows and reserves, they create difficulties for NRIs and limit investment flexibility. Specifically, regulations prohibit NRIs from lending funds directly to companies where they have a stake, requiring such loans to go through more restrictive external commercial borrowing rules instead. This limits business risk reduction, flexibility to meet funding needs, and infringes on individual investment freedom. Statistical analysis of survey responses found strong agreement that the issue is important and regulations should be reformed to be more growth-oriented.
RBI AND THE BANKING REGULATION ACT, 1949Suruchi Jain
The Reserve Bank of India (RBI) regulates banking in India through the Banking Regulation Act of 1949. The Act aims to safeguard deposits, promote banking habits, and attune the monetary system to development needs. Key sections of the Act address reserve requirements, licensing, and regulatory powers. The RBI also uses tools like the repo rate, reverse repo rate, cash reserve ratio, and statutory liquidity ratio to regulate money supply and credit in the banking system. Its role is crucial for economic growth and maintaining price stability in India.
The Reserve Bank of India regulates and supervises Non-Banking Financial Companies. The objectives are to ensure healthy growth, ensure they function as part of the financial system within policy frameworks, and maintain high quality supervision. This document provides clarification on regulatory changes and operational matters for NBFCs, the public, and other stakeholders through a question and answer format. Key differences between banks and NBFCs are that NBFCs cannot accept demand deposits or issue cheques, and deposit insurance is not available for NBFC depositors. Registration with RBI is mandatory for NBFCs, and there are requirements around minimum net owned funds, application process, and classifications of different types of NBFCs.
This document provides information on how to register as a Non-Banking Financial Company (NBFC) in India. It discusses what an NBFC is, the requirements for RBI registration including a minimum net owned fund of Rs. 2 crore, the application process, necessary documents, and various periodic returns that must be filed by deposit-taking and non-deposit taking NBFCs.
The document discusses management of non-performing assets (NPAs) in banks. It defines NPAs and categories them as substandard, doubtful or loss assets depending on the period for which they have remained unpaid. It outlines provisioning norms for different NPA categories. Factors contributing to NPAs include poor credit discipline, inadequate risk management, diversion of funds by promoters and funding non-viable projects. Methods for managing NPAs discussed include preventive measures, resolution through compromise settlements, restructuring, debt recovery tribunals and sale of NPAs.
financial intermediation business (1).pptSumit717679
Financial intermediaries collect savings from depositors and use these funds to purchase assets and issue claims against themselves. The key intermediaries are commercial banks, lease financing, hire purchase, venture capital, and securitization. Commercial banks are the largest and fastest growing financial intermediaries in India. They provide various services like bank accounts, loans, money transfers, credit/debit cards, and lockers. Reforms in the banking sector include interest rate deregulation, adoption of prudential norms, reduction in preemptions, and allowing new private banks. Asset liability management (ALM) matches bank assets and liabilities across various maturity periods to manage liquidity risk. Lease financing involves the owner of an asset providing it to a user
financial intermediation business (2).pptSumit717679
1. Financial intermediaries collect savings from others and issue claims against themselves, using the funds raised to purchase ownership or debt claims. Major intermediaries include commercial banks, lease financing, hire purchase, venture capital, and securitization.
2. Commercial banks are the oldest and largest financial intermediaries in India. They provide services like bank accounts, loans, money transfers, credit/debit cards, and lockers.
3. Lease financing and hire purchase are modes of financing that allow for the purchase of assets over time through periodic rental or installment payments, with ownership transferring at the end of the agreement. Both play an important role in providing access to capital.
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1. MASTER
CIRCULAR
CASH RESERVE RATIO (CRR)
and
STATUTORY LIQUIDITY RATIO (SLR)
DEPARTMENT OF BANKING OPERATIONS AND DEVELOPMENT
RESERVE BANK OF INDIA
CENTRAL OFFICE
MUMBAI
This Master Circular can also be viewed/downloaded from RBI website
www.mastercircular.rbi.org.in
e-mail address of DBOD:- helpdbod@rbi.org.in
0
2. RBI/2004/100
DBOD. No. Ret. BC. 23 /12.01.001/2004-05
August 5, 2004
Chief Executives of all
Scheduled Commercial Banks
Dear Sir,
Master Circular-Cash Reserve Ratio (CRR)
and Statutory Liquidity Ratio (SLR)
As you are aware, the Reserve Bank of India has from time to time, issued a
number of circulars containing instructions to banks on matters relating to
maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR). In
order to enable the banks to have all the extant operating instructions on the
subject at one place, this Master Circular has been prepared.
2. This Master Circular is a compilation of the instructions contained in the
circulars issued by Reserve Bank of India on the above subject, which are
operational as on date of this circular
Yours faithfully,
sd/-
( B.Mahapatra )
Chief General Manager
2
3. Master Circular - Cash Reserve Ratio (CRR) and
Statutory Liquidity Ratio (SLR)
1. General
With a view to monitoring compliance with statutory reserve requirements viz. Cash Reserve Ratio
and Statutory Liquidity Ratio by the Scheduled Commercial Banks, Reserve Bank of India has
prescribed statutory returns i.e. Form A return (for CRR) under Section 42 (2) of the RBI, Act, 1934
and Form VIII return (for SLR) under Section 24 of the Banking Regulation Act, 1949. The broad
details of the reserve requirements are summarised below.
2. Cash Reserve Ratio (CRR)
2.1 Maintenance of CRR
In terms of Section 42(1) of the RBI Act 1934, Scheduled Commercial Banks are required to
maintain with RBI an average cash balance, the amount of which shall not be less than three per
cent of the total of the Net Demand and Time Liabilities (NDTL) in India, on a fortnightly basis and
RBI is empowered to increase the said rate of CRR to such higher rate not exceeding twenty
percent of the Net Demand and Time Liabilities (NDTL) under the RBI Act, 1934. At present,
effective from the fortnight beginning June 14, 2003, the rate of CRR is 4.50 per cent of the NDTL.
2.2 Maintenance of incremental CRR
In terms of Section 42(1A) of RBI Act, 1934, the Scheduled Commercial Banks are required to
maintain, in addition to the balances prescribed under Section 42(1) of the Act, an additional
average daily balance, the amount of which shall not be less than the rate specified by the RBI in
the notification published in the Gazette of India, such additional balance being calculated with
reference to the excess of the total of the NDTL of the bank as shown in the return referred to in
section 42(2) of the RBI Act, 1934 over the total of its NDTL at the close of the business on the
date specified in the notification.
At present no incremental CRR is required to be maintained by the Scheduled Commercial Banks.
2.3 Computation of Demand and Time Liabilities
Liabilities of a bank may be in the form of demand or time deposits or borrowings or other
miscellaneous items of liabilities. Liabilities of the banks may be towards banking system (as
3
4. defined under Section 42 of RBI Act, 1934) or towards others in the form of Demand and Time
deposits or borrowings or other miscellaneous items of liabilities. Reserve Bank of India has been
authorized in terms of Section 42 (1C) of the RBI Act, 1934 to classify any particular liability and
hence for any doubt regarding classification of a particular liability, the banks are advised to
approach RBI for necessary clarification.
2.3.1 Demand Liabilities
'Demand Liabilities' include all liabilities which are payable on demand and they include current
deposits, demand liabilities portion of savings bank deposits, margins held against letters of
credit/guarantees, balances in overdue fixed deposits, cash certificates and cumulative/recurring
deposits, outstanding Telegraphic Transfers (TTs), Mail Transfer (MTs), Demand Drafts ( Ds),
D
unclaimed deposits, credit balances in the Cash Credit account and deposits held as security for
advances which are payable on demand. Money at Call and Short Notice from outside the Banking
System should be shown against liability to others.
2.3.2 Time Liabilities
Time Liabilities are those which are payable otherwise than on demand and they include fixed
deposits, cash certificates, cumulative and recurring deposits, time liabilities portion of savings
bank deposits, staff security deposits, margin held against letters of credit if not payable on
demand, deposits held as securities for advances which are not payable on demand, India
Millennium Deposits and Gold Deposits.
2.3.3 Borrowings from banks abroad
Loans/borrowings from abroad by banks in India will be considered as 'liabilities
to others' and will be subject to reserve requirements.
2.3.4 Arrangements with correspondent banks for remittance facilities
When a bank accepts funds from a client under its remittance facilities scheme, it becomes a
liability (liability to others) in its books. The liability of the bank accepting funds will extinguish only
when the correspondent bank honours the drafts issued by the accepting bank to its customers. As
such, the balance amount in respect of the drafts issued by the accepting bank on its
4
5. correspondent bank under the remittance facilities scheme and remaining unpaid should be
reflected in the accepting bank's books as an outside liability and the same should also be taken
into account for computation of NDTL for CRR/SLR purpose.
The amount received by correspondent banks has to be shown as 'Liability to the Banking System'
by them and not as 'Liability to others' and this liability could be netted off by the correspondent
banks against the inter-bank assets. Likewise sums placed by banks issuing
drafts/interest/dividend warrants are to be treated as 'Assets with Banking System' in their books
and can be netted off from their inter-bank liabilities.
2.3.5 Other Demand and Time Liabilities (ODTL)
Other Demand and Time Liabilities (ODTL) include interest accrued on deposits, bills payable,
unpaid dividends, suspense account balances representing amounts due to other banks or public,
net credit balances in branch adjustment account, any amounts due to the "Banking System"
which are not in the nature of deposits or borrowing. Such liabilities may arise due to items, like (i)
collection of bills on behalf of other banks, (ii) interest due to other banks and so on. If a bank
cannot segregate from the total of "Other Demand and Time Liabilities" (ODTL) the liabilities to the
banking system, the entire 'Other Demand and Time Liabilities' may be shown against item II ( c )
'Other Demand and Time Liabilities' of the return in Form 'A' and average CRR is
required to be maintained on it by all Scheduled Commercial Banks; Participation Certificate
issued to other banks, the balances outstanding in the blocked account pertaining to segregated
outstanding credit entries for more than 5 years in inter branch adjustment account, the margin
money on bills
purchased / discounted and gold borrowed by banks from abroad, also should be included in
ODTL.
2.3.6 Liabilities not to be included for DTL/NDTL computation
The under-noted liabilities will not form part of liabilities for the purpose of CRR :
a) Paid up capital, reserves, any credit balance in the Profit & Loss Account of the bank,
amount availed of as refinance from the RBI, and apex financial institutions like Exim Bank,
IDBI, NABARD, NHB, SIDBI etc.
b) Amount of provision for income tax in excess of the actual estimated liabilities.
5
6. c) Amount received from DICGC towards claims and held by banks pending adjustments
thereof.
d) Amount received from ECGC by invoking the guarantee.
e) Amount received from insurance company on ad-hoc settlement of claims pending
Judgment of the Court.
f) Amount received from the Court Receiver.
g) The liabilities arising on account of utilization of limits under Bankers Acceptance Facility
(BAF)
h) Inter bank term deposits/term borrowing liabilities of original maturity of 15 days and above
and upto one year with effect from fortnight beginning August 11, 2001.
2.3.7 Exempted Categories
Scheduled Commercial Banks are exempted from maintaining average CRR on the following
liabilities :
i) Liabilities to the banking system in India as computed under Clause (d) of the
Explanation to Section 42(1) of the RBI Act, 1934.
ii) Credit balances in ACU (US$) Accounts.
iii) Transactions in Collateralized Borrowing and Lending Obligation
(CBLO) with Clearing Corporation of India Ltd. (CCIL).
iv) Demand and Time Liabilities in respect of their Offshore Banking Units (OBUs).
Although Scheduled Commercial Banks are exempted from maintaining average CRR on the
above liabilities, they are required to maintain 3 per cent statutory reserve thereon. Scheduled
Commercial Banks are not required to include inter-bank term deposits / term borrowing liabilities
of original maturities of 15 days and above and upto one year in 'Liabilities to the Banking System'
(item I of Form 'A'). Similarly banks should exclude their inter-bank assets of term deposits and
term lending of original maturity of 15 days and above and up to one year in 'Assets with the
Banking System' (item III of form A) for the purpose of maintenance of CRR. This concession is
not available for maintenance of SLR.
2.3.8 Loans out of FCNR (B) Deposits and IBFC Deposits
6
7. Loans out of Foreign Currency Non –Resident Accounts (Banks), (FCNR [B] Deposits Scheme)
and Inter-Bank Foreign Currency (IBFC) Deposits should be included as part of bank credit while
reporting in Form ’A’. For the purpose of reporting banks should convert their FCNR (B) Deposits,
Overseas foreign currency assets and bank credit in India in foreign currency in 4 major currencies
into rupees at FEDAI noon mean rate on the reporting Friday.
2.3.9 Assets with the Banking System
Assets with banking system include balances with banks in current accounts, balances with banks
and notified financial institutions in other accounts, funds made available to banking system by
way of loans or deposits repayable at call or short notice of a fortnight or less and loans other than
money at call and short notice made available to the Banking System. Any other amounts due
from banking system which cannot be classified under any of the above items are also to be taken
as assets with the banking system.
2.3.10 Procedure for calculation of CRR
In order to improve the cash management by banks, as a measure of simplification, a lag of one
fortnight in the maintenance of stipulated CRR by banks has been introduced with effect from the
fortnight beginning 6th November 1999. Thus, all Scheduled Commercial Banks are
required to
maintain the prescribed Cash Reserve Ratio (@ 4.50 per cent with effect from the fortnight
beginning June 14, 2003) based on their NDTL as on the last Friday of the second preceding
fortnight.
2.3.11 Maintenance of CRR on daily basis
With a view to providing flexibility to banks in choosing an optimum strategy of holding reserves
depending upon their intra period cash flows, all Scheduled Commercial Banks, are required to
maintain minimum CRR balances upto 70 per cent of the total CRR requirement on all days of the
fortnight with effect from the fortnight beginning December 28, 2002. If any Scheduled
Commercial Bank fails to observe the minimum level of CRR on any day/s during the relevant
7
8. fortnight, the bank will not be paid interest to the extent of one fourteenth of the eligible amount of
interest, even if there is no shortfall in the CRR on average basis.
2.3.12 Payment of interest on eligible cash balances maintained by SCBs with RBI under
CRR
i) All Scheduled Commercial Banks are paid interest on all eligible cash balances maintained
with RBI under proviso to Section 42 (1) and Section 42 (1A) of the RBI Act, 1934, at Bank
Rate from the fortnight beginning November 3, 2001. The rate of interest on CRR
balances has been linked to Bank Rate as announced by RBI from time to time
ii) The Scheduled Commercial Banks were paid 100 per cent interest on CRR balances on
receipt of the quarterly interest claim statements in a prescribed proforma. From the
month of April 2003 onwards, Scheduled Commercial Banks were paid interest on CRR
balances on monthly basis on receipt of interest claim statements. With effect from
August 2004, interest on CRR balances would be paid without obtaining interest claim
statements from Scheduled Commercial Banks.
iii) The amount of interest payable at Bank Rate is to be worked out on the eligible portion of
CRR balances for a period of 14 days. In case the CRR balances held with RBI is less
than the amount required to be maintained for any of the fortnights, eligible interest
will be paid for that defaulted
fortnight only after working out cost of shortfall at the rate of 25 per cent per annum and
subtracting the amount so worked out from interest payable amount.
2.3.13 Penalties
Shortfall, if any, observed in the maintenance of the CRR is reckoned against the eligible cash
balances required to be maintained on the NDTL. The total amount of interest payable so arrived
at is being reduced by an amount calculated at the rate of 25 per cent per annum on the amount of
shortfall. In a situation where shortfall exceeds the level at which no interest becomes payable on
eligible balances held by a bank on net basis i.e. (after interest deduction on the amount of CRR
shortfall) the penal interest under sub-section (3) of Section 42 of the RBI Act, 1934 is made
applicable.
8
9. The Scheduled Commercial Banks are required to furnish the particulars, such as date, amount,
percentage, reason for default in maintenance of requisite CRR and also action taken to avoid
recurrence of such default.
2.3.14 Fortnightly return in Form ‘A’
Under section 42 (2) of RBI Act, 1934, all Scheduled Commercial Banks are required to submit to
RBI a provisional return in Form 'A' within 7 days from the expiry of the relevant fortnight. It is used
for preparing press communiqué. The final Form 'A' is required to be sent to RBI within 20 days
from expiry of the relevant fortnight. Based on the recommendation of the Working Group on
Money Supply: Analytics and Methodology of Compilation, all Scheduled Commercial Banks in
India are required to submit from the fortnight beginning October 9, 1998, Memorandum to form 'A'
giving details about paid-up capital, reserves, time deposits comprising of short term and long
term, certificates of deposits, NDTL, total CRR requirement etc., Annexure A to form ‘A’ return
showing all foreign currency liabilities and assets and Annexure B to form ‘A’ return giving details
about investment in approved securities, investment in non-approved securities, memo items such
as subscription to shares /debentures / bonds in primary market and subscriptions through private
placement.
For reporting in Form 'A' return, banks should convert their overseas foreign currency assets and
bank credit in India in foreign currency in four major currencies viz., US dollar, GBP, Japanese Yen
and Euro at the FEDAI noon mean rate on reporting Friday.
There is no change in the existing format of fortnightly returns in Form ‘A’ and the method of
computing DTL in Form ‘A’ i.e. if (I-III) is positive, then [(I-III) plus II], otherwise only II.
The explanations to item No's. I, II and III of the return in form 'A' are given below:
Item I - Liabilities to the Banking System in India .
Item II - Liabilities to Others in India.
Item III - Assets with the Banking System in India.
In terms of Clause (d) of explanation to Section 42 (1) of RBI Act, 1934, the amount of net inter-
bank liabilities is to be calculated after reducing assets with banking system from liabilities to the
9
10. banking system. Inter bank deposits and borrowings within the banking system, of maturity period
of 15 days and above and upto one year, are totally excluded from liabilities to the banking
systems with effect from the fortnight beginning August 11, 2001. For the purpose of working out
liabilities to be subjected to CRR at rates prescribed from time to time (at present 4.5 per cent with
effect from the fortnight beginning June 14, 2003) under section 42 (1) of RBI Act 1934, if net inter-
bank liabilities are positive, they should be deducted from total net demand and time liabilities.
However for the purpose of working out Statutory minimum CRR of 3 per cent on total net demand
and time liabilities, net inter-bank liabilities should be included.
3. Statutory Liquidity Ratio (SLR)
In terms of Section 24 (2-A) of the B.R. Act, 1949 all Scheduled Commercial Banks, in addition to
the average daily balance which they are required to maintain under Section 42 of the RBI Act,
1934, are required to maintain in India,
a) in cash, or
b) in gold valued at a price not exceeding the current market price,
or
c) in unencumbered approved securities valued at a price as specified
by the RBI from time to time.
an amount of which shall not, at the close of the business on any day, be less than 25 per cent or
such other percentage not exceeding 40 per cent as the RBI may from time to time, by notification
in gazette of India, specify, of the total of its demand and time liabilities in India as on the last
Friday of the second preceding fortnight,
At present, all Scheduled Commercial Banks are required to maintain a uniform SLR of 25 per cent
of the total of their demand and time liabilities in India as on the last Friday of the second
preceding fortnight which is stipulated under section 24 of the B.R. Act, 1949.
3.1 Procedure for computation of demand and time liabilities for SLR
The procedure to compute total net demand and time liabilities for the purpose of SLR under
Section 24 (2) (B) of B.R. Act 1949 is similar to the procedure followed for CRR purpose. However,
it is clarified that Scheduled Commercial Banks are required to include inter-bank term deposits /
10
11. term borrowing liabilities of original maturities of 15 days and above and up to one year in
'Liabilities to the Banking System'. Similarly banks should include their inter-bank assets of term
deposits and term lending of original maturity of 15 days and above and up to one year in 'Assets
with the Banking System' for the purpose of maintenance of SLR. However, both the above
liabilities and assets are not to be included in liabilities/assets to the banking system for
computation
of DTL/NDTL for the purpose of CRR as mentioned in paragraph 2.3.7 above.
3.2 Valuation of approved securities for SLR
The entire investment portfolio of the banks (including SLR Securities) will be classified under
three categories viz.' Held to Maturity', 'Available for sale' and 'Held for Trading'.
Investment classified under Held to Maturity category need not be marked to market and will
be carried at acquisition cost unless it is more than the face value. In such a case, the premium
should be amortised over a period remaining to maturity.
Individual scrips in the Available for Sale category will be marked to market at the year-end or
at more frequent intervals. The net depreciation under each classification should be recognized
and fully provided for and any appreciation should be ignored. The book value of the individual
securities would not undergo any change after the revaluation.
The individual scrips in the Held for Trading category will be revalued at monthly or at more
frequent intervals and net appreciation/depreciation under each classification will be
recognized in income account. The book value of the individual scrip will be changed with
revaluation.
3.3 Penalties
If a banking company fails to maintain the required amount of SLR, it shall be liable to pay to RBI
in respect of that default, the penal interest for that day at the rate of 3 per cent per annum above
the bank rate on the shortfall and if the default continues on the next succeeding working day, the
penal interest may be increased to a rate of 5 percent per annum above the Bank Rate for the
concerned days of default on the shortfall.
11
12. 3.4 Return in Form VIII (SLR) to be submitted to RBI
(i) Banks should submit to the RBI before 20th day of every month, a return in form VIII
showing the amounts of SLR held on alternate Fridays during immediate preceding
month with particulars of their DTL in India held on such Fridays or if any such Friday is
a public holiday under the Negotiable Instruments Act, 1881, at the close of business on
the preceding working day.
(ii) Banks should also submit a statement as annexure to form VIII giving daily position of
(a) value of securities held for the purpose of
compliance with SLR and (b) the excess cash balances maintained by them with RBI in
the prescribed format.
3.5 Correctness of computation of demand and time liabilities to be certified by Statutory
Auditors.
The Statutory Auditors should verify and certify that all items of outside liabilities, as per the bank's
books had been duly compiled by the bank and correctly reflected under DTL/NDTL in the
fortnightly/monthly statutory returns submitted to RBI for the financial year.
12
13. Appendix
Master Circular
Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)
List of circulars consolidated by the Master Circular
Sr. Circular No Date Subject Corresponding
No. paragraph
number in this
master circular
1 DBOD.No.Leg. 23/03/1985 Demand Liabilities, Time 2.3.1, 2.3.2,
BC. 34/C.233A- liability, ODTL 2.3.5, 3.4 (i)
85
2 DBOD.No.BC. 13/10/1997 Borrowings under paragraph 2.3.3
111/12.02.001/97 5.B.8(1) of Exchange Control
Manual- Maintenance of
reserve requirement
3 DBOD.No.Ret.BC. 21/08/2003 Computation of Net Demand 2.3.4
14/12.01.001/2003 and Time Liabilities (NDTL)
-04 for the purpose of
maintenance of CRR/SLR
4 DBOD.No.149/C. 27/12/1971 Participation Certificate to be 2.3.5
236(G)71 included in ODTL
5 DBOD.No.BC.58/ 13/05/1995 Margin money on bills 2.3.5
12.02.001/94-95 purchased
6 DBOD.No.Ret.BC. 27/03/1986 Amount received from DICGC 2.3.6 (c)
40/c.236(G)Spl-86
7 DBOD.No.Ret/BC. 12/09/1986 Exclusion from NDTL-Receipt 2.3.6 (d, e, f)
98/C.96(Ret)-86 from Court Receiver,
Insurance and ECGC
8 DBOD.No.BC.191 2/11/1993 Rediscounting of Export Bills 2.3.6 (g)
/12.01.001/93 abroad
9 DBOD.No.BC.5/1 7/08/2001 Reporting of Inter-bank 2.3.6(h), 2.3.7
2.01.001/2001-02 liabilities in Form A
10 DBOD.No.BC.82/ 26/03/2002 Maintenance of CRR-ACU 2.3.7(ii)
12.01.001/2001- Dollar Funds-Exemption of
2002
11 DBOD.No.Ret.BC. 14/01/2004 Maintenance of CRR/SLR on 2.3.7(iii)
63/12.01.001/2003 transaction in Collateralised
-04 Borrowing and Lending
Obligation (CBLO)
12 DBOD.IBS.BC.88 27/03/2003 Offshore Banking Units 2.3.7 (iv)
/23.13.004/2002- (OBUs) in Special Economic
03 Zones (SEZs)
…2
13
14. 13 DBOD.No.BC50/1 7/11/2000 Collection of Data from 2.3.8
2.01.001/2000-01 Scheduled Commercial Banks
in Annexure A and B
14 DBOD.No.Ret.BC. 29/04/2003 Maintenance of Cash Reserve 2.3.10
99/12.01.001/2002 Ratio (CRR)
-03
15 DBOD.No.BC.54/ 27/12/2002 Relaxation in Daily Minimum 2.3.11
12.01.001/2002- Cash Reserve Maintenance
03 Requirement
16 DBOD.No.BC.34/ 22/10/2001 Maintenance of Cash Reserve 2.3.12
12.01.001/2001- Ratio(CRR)
02
17 DBOD.No.BC.34/ 22/10/2001 Maintenance of Cash Reserve 2.3.12(1)
12.01.001/2001- Ratio (CRR)
02
18 DBOD.Ret.BC.No. 7/03/2004 Payment of interest on eligible 2.3.12 (ii)
79/12.01.001/2002 CRR balances on monthly
-2003 basis-Revision in the format for
submission of interest claim-
Introduction of New software for
Form A
19 DBOD.No.Ret.BC. 18/06/2004 Revision of procedure for 2.3.12 (ii)
98/12.01.001/2003 payment of interest on the
-04 eligible CRR balances on
monthly basis
20 DBOD.No.Ret.BC. 24/12/1990 Shortfall in the maintenance of 2.3.12(iii)
61/C.96 (Ret)-90 Cash Reserve Ratio (CRR)-
Scheme of Graduated Interest
Rates
21 DBOD.BC.89/12. 24/08/1998 Return in Form 'A' 2.3.14
01.001/98-99
22 DBOD.No.BC.117 21/10/1997 Rationalisation of Statutory 3
/12.02.01/97-98 Liquidity Ratio (SLR)
23 DBOD.No.BP.BC. 16/10/2000 Guidelines for Classification 3.2
32/21.04.048/200 and Valuation of Investments
0-2001 by banks
24 DBOD.No.BC.87/ 10/04/2002 Valuation of Securities for the 3.2
12.02.001/2001- purpose of SLR
2002
25 CPC.BC.69/279 20/10/1984 Provisional data on 3.4(ii)
(A)-84 maintenance of Statutory
Liquidity Requirement
Supplemental information to the
special Return
14