RBI raises average CRR maintenance requirement for banks
The Reserve Bank of India will raise the minimum daily cash reserve ratio requirement for banks to 99% from 90%. This change will take effect from the fortnight starting October 16, 2026. The move aims to reduce the current surplus liquidity within the banking system, requiring banks to maintain this increased percentage without the previous operational flexibility.
What this means
The RBI has raised banks' minimum daily CRR maintenance requirement to 99% from 90%. Previously, banks had more flexibility to manage CRR maintenance by averaging it over a fortnight. Now, this change, taking effect for the fortnight beginning October 16, 2026, requires banks to maintain a higher portion of their CRR balance daily. This aims to absorb excess liquidity from the banking system.
Most affected: Bank treasuries, money markets, short-term liquidity
Key takeaway: Adjust daily cash management strategies to account for tighter CRR maintenance, anticipating potential upward pressure on overnight rates.
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