What changed
This is a master circular consolidating all prior instructions on CRR and SLR for urban co-operative banks up to June 30, 2011. It updates the previous master circular dated July 1, 2010. No new policy changes were introduced; it serves as a single reference document.
What it means for you
UCBs must continue maintaining statutory reserves as per their classification: scheduled UCBs under RBI Act Section 42 (CRR) and all UCBs under BR Act Section 24 (SLR). The removal of CRR floor/celling since 2007 gives RBI flexibility to adjust rates. Banks must maintain daily liquidity registers and ensure CEO oversight for compliance.
What you must do
- Maintain daily register of cash reserve and liquid assets as per Annex 8 format.
- Ensure CEO reviews the daily register for compliance with CRR and SLR requirements.
- Scheduled UCBs: compute CRR as per Section 42 of RBI Act, 1934 (no floor/cap).
- Non-scheduled UCBs: follow Section 18 of BR Act, 1949 for cash reserves.
- All UCBs: maintain SLR as per Section 24 of BR Act, 1949.
Who it affects
All Primary (Urban) Co-operative Banks (scheduled and non-scheduled), Chief Executive Officers of UCBs, Compliance and treasury teams of UCBs
What is the CRR requirement for scheduled UCBs under this circular?
Scheduled UCBs must maintain CRR as prescribed by RBI under Section 42(1) of RBI Act, 1934. Since April 1, 2007, there is no floor or ceiling rate; RBI sets the rate based on monetary stability needs.
Are non-scheduled UCBs subject to the same SLR rules as scheduled UCBs?
Yes, both scheduled and non-scheduled UCBs must maintain SLR under Section 24 of the Banking Regulation Act, 1949 (as applicable to co-operative societies).
What record-keeping is required for statutory reserves?
All UCBs must maintain a daily register in the format given in Annex 8, showing cash reserve and liquid assets positions. A responsible official should handle it, and it must be reviewed daily by the CEO.