The Reserve Bank of India (RBI) raised the minimum daily Cash Reserve Ratio (CRR) maintenance requirement for scheduled banks from 90% to 99% of the prescribed CRR. The change takes effect from the reporting fortnight beginning 16 October 2026, while the overall CRR remains unchanged at 3%. The RBI announced the measure on 9 October 2026 amid banking-system surplus liquidity of about ₹3.88 lakh crore as of 8 October.
CRR and daily maintenance
CRR is the proportion of a bank’s Net Demand and Time Liabilities (NDTL) that it must maintain as a cash balance with the RBI. The RBI prescribes the CRR under the Reserve Bank of India Act, 1934, and scheduled commercial banks are required to comply with it. Before the revision, banks had to maintain at least 90% of the prescribed CRR on each day of a reporting fortnight. They were required to meet the full prescribed CRR on average over that fortnight. From 16 October, the daily minimum rises to 99%, reducing the permitted day-to-day shortfall while leaving the overall CRR rate at 3%.
Liquidity management operations
The RBI uses liquidity-management operations to absorb or inject funds into the banking system. An Open Market Operation (OMO) involves the RBI’s purchase or sale of government securities; a sale absorbs liquidity from banks and other market participants. The RBI scheduled an OMO sale of government securities worth ₹25,000 crore for 13 October 2026. The revised daily CRR maintenance requirement is expected to impound an additional ₹1 lakh crore from the banking system. These measures follow the RBI’s 7 October decision to increase the policy repo rate by 25 basis points to 5.50%.
Repo rate and FCNR-B deposits
The policy repo rate is the rate at which the RBI lends short-term funds to eligible banks against securities under its liquidity framework. A basis point is one-hundredth of a percentage point; a 25-basis-point increase equals 0.25 percentage points. The surplus liquidity was partly attributed to increased dollar deposits mobilised through the RBI’s Foreign Currency Non-Resident Bank (FCNR-B) deposit scheme, which ended on 31 August 2026. FCNR-B accounts allow eligible non-resident Indians to hold term deposits in permitted foreign currencies.
Important Facts for Exams
- The CRR is maintained by banks as cash balances with the Reserve Bank of India.
- The prescribed CRR remains 3%, while the daily maintenance floor rises to 99% from 90%.
- The RBI’s scheduled OMO sale of government securities is valued at ₹25,000 crore.
- The policy repo rate was raised to 5.50% after an increase of 25 basis points on 7 October 2026.
The revised daily CRR requirement begins with the reporting fortnight starting 16 October 2026. The RBI’s scheduled OMO sale is set for 13 October 2026.
