RBI hikes CRR for non-scheduled urban co-operative banks
The Reserve Bank of India (RBI) raised the Cash Reserve Ratio (CRR) for non-scheduled Urban Co-operative Banks (UCBs) by 100 basis points from 3% to 4%. The step will bring nonscheduled UCBs on par with scheduled primary urban co-operative banks. There are around 1,500 unscheduled UCBs in India.
CRR is a part of a bank’s deposits that it needs to keep with RBI. This money generates no interest. The current CRR level is 4%.
In an another step, the apex bank has slashed the Statutory Liquidity Ratio (SLR) requirement for the primary UCBs by 50 basis points to 22.50% in order to bring them on equal footing with commercial banks.SLR is that portion of a bank’s deposits that it needs to maintain in gold, government bonds and securities.