DBOD.No.Ret.BC.54/12.01.001/2002-03

December 27, 2002
Pausha 6, 1924 (saka)

To All Scheduled Commercial Banks
(Excluding Regional Rural Banks and Local
Area Banks)

Dear Sir,

Section 42(1) of the Reserve Bank of India Act,
1934 - Relaxation in Daily Minimum Cash Reserve
Maintenance Requirement

Please refer to para 1(b) of our circular DBOD No. BC.35/12.01.001/2002-03 dated October 29, 2002 on the above subject.

2. As mentioned therein, presently banks are required to maintain a minimum of 80 per cent of required CRR amount on a daily basis during a fortnight, which is applicable on all days of the reporting fortnight. With a view to providing flexibility to banks in choosing an optimum strategy of holding reserves depending upon their intra-period cash flows, it has been decided to reduce the present requirement of minimum of 80 per cent of the CRR balances to be maintained to 70 per cent with effect from the fortnight beginning December 28, 2002.

(S.Oram)
Dy.General Manager