Credit Control and other Measures - आरबीआय - Reserve Bank of India
Credit Control and other Measures
July 2000
Selected circulars issued by the Reserve Bank of India during July 2000 are reproduced below.
Ref. UBD No.Plan.SPCB. 01/09.09.01/2000-2001 dated July 01, 2000
All Scheduled Primary (Urban) Co-operative Banks
Priority Sector Lending - Lending to NBFCs for On-lending to Agriculture
Please refer to our Circular UBD. No. Plan.PCB.33/09.09.01/96-97 dated December 13, 1996 in terms of which all Primary (Urban) Cooperative Banks are allowed to finance agricultural activities under Priority Sector.
2. |
With a view to providing one more avenue for bank's lending to agriculture and increasing the outreach of banks in rural areas, it has been decided that lending by Scheduled Primary (Urban) Co-operative banks to Non Banking Financial Companies (NBFCs) for on-lending to agriculture may be reckoned for the purpose of priority sector lending as indirect finance to agriculture. |
3. |
The financing of NBFCs for on-lending to agriculture may be reported to us under indirect finance to Agriculture in the statement on priority sector advances. |
Ref. No. MPD.198/07.01.279/2000-2001 dated July 21, 2000
All Scheduled Commercial Banks
Bank Rate
It has been decided that with effect from the close of business today (July 21, 2000), the Bank Rate will be increased by one percentage point from '7.0 per cent per annum , to '8.0 per cent per annum'.
2. |
All interest rates on advances from the Reserve Bank as also the penal rates on shortfall on reserve requirements which are specifically linked to the Bank Rate stand revised as indicated in the Annexure. |
Annexure |
Interest Rates on Advances from Reserve Bank and Penal Rates which are at present Linked to the Bank Rate |
Sr. No. |
Advances to |
Existing Rates |
New Rates |
(Effective close |
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of business on |
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|
|
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(July 21, 2000) |
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|
(Per cent per annum) |
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1. |
Scheduled Commercial Banks |
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i) Export Credit Refinance Facility |
Bank Rate |
Bank Rate |
|
(7.0) |
(8.0) |
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ii) Collateralised Lending Facility |
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CLF |
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Block I |
Bank Rate |
Bank Rate |
|
(First 2 weeks) |
(7.0) |
(8.0) |
|
Block II |
Bank Rate plus |
Bank Rate plus |
|
|
(From 3rd week onwards) |
2.0 percentage points (9.0) |
2.0 percentage points (10.0) |
2. |
State Co-operative Banks (SCBs) |
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Towards general banking |
Bank Rate |
Bank Rate |
|
business such as clearing |
(7.0) |
(8.0) |
|
|
adjustments, Liquidity, etc. |
|
|
3. |
NABARD |
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General Line of Credit (GLC) |
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i) GLC I |
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To Provide Refinance in respect of loans |
Bank Rate minus |
Bank Rate minus |
|
and advances for the purposes of seasonal |
1 percentage point |
2 percentage points |
|
agricultural operations (SAO) made by |
(6.0) |
(6.0) |
|
SCBs and Regional Rural Banks (RRBs) |
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ii) GLC II |
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To provide refinance to SCB'S, RRBs and |
Bank Rate minus |
Bank Rate minus |
|
commercial banks for refinancing Weavers' |
0.5 percentage points |
1.5 percentage points |
|
Co-op. society and for other approved |
(6.5) |
(6.5) |
|
|
short-term purposes |
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|
4. |
Primary (Urban) Co-op. Banks |
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i) Export Credit Refinance Facility |
Bank Rate |
Bank Rate |
|
(7.0) |
(8.0) |
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ii) For SSI |
Bank Rate |
Bank Rate |
|
|
|
(7.0) |
(8.0) |
5. |
SIDBI (from NIC (LTO) Fund |
Bank Rate |
Bank Rate |
|
out of the loan repayment made by IDBI) |
(7.0) |
(8.0) |
6. |
Primary Dealers (PDs) |
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To enable PDs to effectively fulfill their |
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obligations, the RBI is extending liquidity |
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support to them against the security of holdings |
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in Subsidiary General Ledger (SGL) Accounts |
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Level I |
Bank Rate |
Bank Rate |
|
|
|
(7.0) |
(8.0) |
7. |
State Financial |
Bank Rate |
Bank Rate |
|
Corporations |
(7.0) |
(8.0) |
8. |
Government of India |
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a) Shortfalls in minimum balances |
Bank Rate |
Bank Rate |
|
(7.0) |
(8.0) |
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b) Ways and Means Advances |
Bank Rate |
Bank Rate |
|
(7.0) |
(8.0) |
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c) Overdraft |
Bank Rate plus |
Bank Rate plus |
|
2.0 percentage points |
2 percentage points |
||
|
|
(9.0) |
(10.0) |
9. |
State Governments |
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a) Shortfalls in minimum balances |
Bank Rate |
Bank Rate |
|
(7.0) |
(8.0) |
||
b) Ways and Means Advances |
Bank Rate |
Bank Rate |
|
(7.0) |
(8.0) |
||
c) Overdraft |
Bank Rate plus |
Bank Rate plus |
|
2.0 percentage points |
2.0 percentage points |
||
|
|
(9.0) |
(10.0) |
Penal Interest Rates on shortfalls in |
Bank Rate plus3 percentage |
Bank Rate plus3 percentage |
|
reserve requirements depending on |
points (10.0) or Bank Rate |
points (11.0) or Bank Rate |
|
duration of shortfalls |
plus 5 percentage points |
plus 5.0 percentage points |
|
|
(12.0) |
(13.0) |
Ref. No. MPD.BC.200/07.01.279/2000-2001 dated July 21, 2000
All Scheduled Commercial Banks
Export Credit Refinance and Collateralised Lending Facility
After a review of recent developments in the international and domestic financial markets, including the foreign exchange market, the following measures, inter alia, in respect of export credit refinance and Collateralised Lending Facility (CLF) from the Reserve Bank of India are being undertaken.
2. |
Limits available to the banks under export credit refinance and CLF will temporarily be reduced to the extent of 50 per cent of the eligible limits as per the present formulae. This will be implemented under two stages: reduction by 25 per cent effective July 29, 2000 and by another 25 per cent effective August 12, 2000 as detailed below: |
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Limits as per the present |
Revised Limit effective |
Revised Limit effective |
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Formula |
July 29, 2000 |
August 12, 2000 |
|
(1) |
(2) |
(3) |
(a) |
Export Credit Refinance: |
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Equivalent to 100 per cent of the |
75 per cent of |
50 per cent of |
|
increase in outstanding export |
Col. 1 |
Col. 1 |
|
credit eligible for refinace over |
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the level of such credit as on |
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February 16, 1996 |
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(b) |
Collateralised Lending Facility |
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Equivalent to 0.25 per cent of |
75 per cent of |
50 per cent of |
|
fortnightly average outstanding |
Col. 1 |
Col. 1 |
|
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aggregate deposits in 1997-98 |
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|
3. |
The Bank Rate has been increased by one percentage point from '7.0 per cent per annum' to '8.0 per cent per annum' with effect from the close of business today (July 21, 2000). Accordingly, effective July 22, 2000, interest rate on export credit refinance will be increased from '7.0 per cent per annum' to '8.0 per cent per annum'. Similarly, effective July 22, 2000, interest rates on CLF would also stand revised as given below: |
Rate of Interest |
|
(per cent per annum) |
|
Block I |
Bank Rate |
(First 2 Weeks) |
(8.0) |
Block II |
Bank Rate plus |
(From 3rd week onwards) |
2 percentage points |
(10.0) |
4. |
All other terms and conditions remain unchanged. |
Ref. No. MPD.199/07.01.279/2000-2001 dated July 21, 2000
All Scheduled Commercial Banks
Cash Reserve Ratio
Under Section 42(1) of the Reserve Bank of India Act, 1934, all scheduled commercial banks (excluding Regional Rural Banks) are, at present, required to maintain with the Reseve Bank of India a Cash Reserve Ratio (CRR) of 8.0 per cent of the Net Demand and Time Liabilities (NDTL) (excluding liabilities subject to zero CRR prescription). It has been now decided to increase CRR by one half of one percentage point in two stages by 0.25 percentage point each, effective from fortnights beginning July 29 and August 12, 2000, respectively.
2. |
The increase in CRR by 0.5 percentage point will absorb lendable resources of banks by about Rs. 3,800 crore. |
3. |
A notification of the above measure is being issued to banks separately. |