Cash Reserve Ratio (CRR)

Cash Reserve Ratio (CRR)

December 01, 2022
   1.00% on Mar 28, 2020
1 Yr ago 5 Yr ago 10 Yr ago
3.00% 4.00% 4.25%

Major Monetary Policy Rates And Reserve Requirements

Effective Date
May 22, 2020
May 22, 2020
May 22, 2020
Mar 28, 2020
Apr 11, 2020
(Source: RBI)

Chart of Cash Reserve Ratio (CRR)

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Source: Reserve Bank of India

Current CRR Rate

The current Cash Reserve Ratio (CRR) is 3.00%

. The Cash Reserve Ratio (CRR) last witnessed a change in its level on March 28, 2020 when it declined by 1.00% from its previous level of 4.00%.

As of today, i.e. on December 01, 2022, the Policy Rates which include Repo Rate stood at 4.00%, Reverse Repo Rate at 3.35%, Marginal Standing Facility (MSF) Rate at 4.25% and Bank Rate at 4.25%. The Reserve Ratios which include Cash Reserve Ratio (CRR) stood at 3.00% and the Statutory Liquidity Ratio (SLR) at 18.00%, according to data of Major Monetary Policy Rates and Reserve Requirements released by the Reserve Bank of India.

Cash Reserve Ratio (CRR) Comparision Chart

Cash Reserve Ratio (CRR) Vs
Cash Reserve Ratio (CRR) Comparision Chart
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Source: Reserve Bank of India

What is Cash Reserve Ratio (CRR)?

Cash Reserve Ratio is a prescribed percentage of bank deposits which banks are required to keep with Central Bank in the form of reserves or balances.

The two main objectives of CRR are:

  1. That banks should have sufficient cash at all times to meet the payment demands of their deposit customers; and
  2. It is a tool of monetary policy to control money supply in the economy. Higher the CRR with the Central Bank, lower will be the liquidity in the system. On the other hand, banks have more money to themselves if Central Bank lowers the CRR leading to higher liquidity in the system.

Cash Reserve Ratio (CRR) in India

In terms of Section 42(1) of the RBI Act, 1934 the Reserve Bank, having regard to the needs of securing the monetary stability in the country, prescribes the Cash Reserve Ratio (CRR) for Scheduled Commercial Banks (SCBs) without any floor or ceiling rate.

Current Level

Under section 42(1) of Reserve Bank of India Act, 1934, all Scheduled Banks are required to maintain with Reserve Bank of India a Cash Reserve Ratio (CRR) of 3.00 per cent of Net Demand and Time Liabilities (NDTL).

Computation of DTL

Liabilities of a bank may be in the form of

  1. Demand Liabilities: Demand Liabilities of a bank are liabilities which are payable on demand. These include:
    1. current deposits,
    2. demand liabilities portion of savings bank deposits,
    3. margins held against letters of credit/guarantees,
    4. balances in overdue fixed deposits,
    5. cash certificates and cumulative/recurring deposits,
    6. outstanding Telegraphic Transfers (TTs),
    7. Mail Transfers (MTs),
    8. Demand Drafts (DDs),
    9. unclaimed deposits,
    10. credit balances in the Cash Credit account,
    11. Deposits held as security for advances which are payable on demand,
  2. Time Liabilities: Time Liabilities of a bank are those which are payable otherwise than on demand. These include:
    1. fixed deposits,
    2. cash certificates,
    3. cumulative and recurring deposits,
    4. time liabilities portion of savings bank deposits,
    5. staff security deposits,
    6. margin held against letters of credit, if not payable on demand, deposits held as securities for advances which are not payable on demand and
    7. Gold deposits
  3. Other Demand and Time Liabilities (ODTL): ODTL include:
    1. interest accrued on deposits,
    2. bills payable,
    3. unpaid dividends,
    4. suspense account balances representing amounts due to other banks or public,
    5. net credit balances in branch adjustment account,
    6. any amounts due to the banking system which are not in the nature of deposits or borrowing. Such liabilities may arise due to items like collection of bills on behalf of other banks, interest due to other banks and so on.
  4. Assets with the Banking System: Assets with the banking system include:
    1. balances with banks in current account,
    2. balances with banks and notified financial institutions in other accounts,
    3. funds made available to banking system by way of loans or deposits repayable at call or short notice of a fortnight or less and loans other than money at call and short notice made available to the banking system.
  5. Borrowings from abroad by banks in India: Loans/borrowings from abroad by banks in India will be considered as 'liabilities to others' and will be subject to reserve requirements.
  6. Arrangements with Correspondent Banks for Remittance Facilities: When a bank accepts funds from a client under its remittance facilities scheme, it becomes a liability (liability to others) in its books. The liability of the bank accepting funds will extinguish only when the correspondent bank honours the drafts issued by the accepting bank to its customers. As such, the balance amount in respect of the drafts issued by the accepting bank on its correspondent bank under the remittance facilities scheme and remaining unpaid should be reflected in the accepting bank's books as liability under the head 'Liability to others in India' and the same should also be taken into account for computation of DTL for CRR/SLR purpose.

Liabilities of a bank may be towards the banking system or towards others in the form of demand and time deposits or borrowings or other miscellaneous items of liabilities.

Exempted Categories

SCBs are exempted from maintaining CRR on the following liabilities:

  1. Liabilities to the banking system in India as computed under clause (d) of the explanation to Section 42(1) of the RBI Act, 1934,
  2. Credit balances in ACU (US$) Accounts,
  3. Demand and Time Liabilities in respect of their Offshore Banking Units (OBU)
  4. The eligible amount of incremental FCNR (B) and NRE deposits of maturities of three years and above from the base date of July 26, 2013, and outstanding as on March 7, 2014, till their maturities/pre-mature withdrawals, and
  5. Minimum of Eligible Credit (EC) and outstanding Long term Bonds (LB) to finance Infrastructure Loans and affordable housing loans.

Composition of CRR

CRR includes a credit balance in the current account that every all banks maintains at RBI and the cash balances in the ‘currency chest’. As currency chest operate on behalf of the Reserve Bank, the cash deposited in the currency chest by the banks is deemed to be deposited with the RBI.

Maintenance of CRR on Daily Basis

With a view to providing flexibility to banks in choosing an optimum strategy of holding reserves depending upon their intra fortnight cash flows, all SCBs are required to maintain minimum CRR balances up to 95 per cent of the average daily required reserves for a reporting fortnight on all days of the fortnight.

No Interest Payment on Eligible Cash Balances maintained by SCBs with RBI under CRR

The Reserve Bank does not pay any interest on the CRR balances maintained by SCBs with effect from the fortnight beginning March 31, 2007 after amendment of the RBI Act 1934, omitting sub-section (1B) of Section 42.

Fortnightly Return in Form A (CRR)

Under Section 42(2) of the RBI Act, 1934, all SCBs are required to submit to Reserve Bank a provisional Return in Form 'A' within 7 days from the expiry of the relevant fortnight. The final Form 'A' Return is required to be submitted to RBI within 20 days from expiry of the relevant fortnight.


Penal interest is charged as under in cases of default in maintenance of CRR by SCBs:

  1. In case of default in maintenance of CRR requirement on a daily basis which is currently 95 per cent of the total CRR requirement, penal interest will be recovered for that day at the rate of three per cent per annum above the Bank Rate on the amount by which the amount actually maintained falls short of the prescribed minimum on that day and if the shortfall continues on the next succeeding day/s, penal interest will be recovered at the rate of five per cent per annum above the Bank Rate.
  2. In cases of default in maintenance of CRR on average basis during a fortnight, penal interest will be recovered as envisaged in sub-section (3) of Section 42 of Reserve Bank of India Act, 1934.

  • The Federal Reserve has a responsibility to ensure the safety and soundness of financial institutions and to contain systemic risks in financial markets.

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Cash Reserve Ratio (CRR)
Historical Rate

Select Date

Cash Reserve Ratio (CRR)


Mar 28, 2020 3.00% 1.00%
Feb 09, 2013 4.00% 0.25%
Nov 03, 2012 4.25% 0.25%
Sep 22, 2012 4.50% 0.25%
Mar 10, 2012 4.75% 0.75%
Jan 28, 2012 5.50% 0.50%
Apr 24, 2010 6.00% 0.25%
Feb 27, 2010 5.75% 0.25%
Feb 13, 2010 5.50% 0.50%
Jan 17, 2009 5.00% 0.50%
Nov 08, 2008 5.50% 0.50%
Oct 25, 2008 6.00% 0.50%
Oct 11, 2008 6.50% 2.50%
Aug 30, 2008 9.00% 0.25%
Jul 19, 2008 8.75% 0.25%
Jul 05, 2008 8.50% 0.25%
May 24, 2008 8.25% 0.25%
May 10, 2008 8.00% 0.25%
Apr 26, 2008 7.75% 0.25%
Nov 10, 2007 7.50% 0.50%
Aug 04, 2007 7.00% 0.50%
Apr 28, 2007 6.50% 0.25%
Apr 14, 2007 6.25% 0.25%
Mar 03, 2007 6.00% 0.25%
Feb 17, 2007 5.75% 0.25%
Jan 06, 2007 5.50% 0.25%
Dec 23, 2006 5.25% 0.25%
Oct 02, 2004 5.00% 0.25%
Sep 18, 2004 4.75% 0.25%

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