DBOD. No.Ret.BC. 85 /12.01.001/2006-07

April 20, 2007

NOTIFICATION

Consequent upon the notification of Section 3 of the Reserve Bank of India (Amendment) Act, 2006 as coming into force with effect from April 01, 2007, the amendment carried out to sub-section (1) of Section 42 of the Reserve Bank of India Act, 1934 (2 of 1934) has been brought into force. Accordingly, the statutory minimum Cash Reserve Ratio (CRR) requirement of 3 per cent of the total demand and time liabilities in respect of Scheduled Commercial Banks no longer exists with effect from April 01, 2007.  Therefore, it has been decided to modify  the operation of the notification DBOD. No .BC. 63 /12.01.001/ 2006-2007 dated March 01, 2007 accordingly with effect from April 01, 2007. In exercise of the powers conferred by sub-section (7) of Section 42 of the Reserve Bank of India Act, 1934, the Reserve Bank of India hereby exempts every Scheduled Commercial Bank from the maintenance of  Cash Reserve Ratio (CRR) on the following liabilities with effect from April 01, 2007:

(i) Liabilities to the banking system in India as computed under Clause (d)  of the explanation to sub-section (1) of Section 42 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);and

(iv)  Demand and Time Liabilities in respect of their Offshore Banking Units (OBUs)

(Anand Sinha)
Executive Director