RBI Raises Banks’ Minimum Daily CRR Maintenance to 99% from October 16

The Reserve Bank of India (RBI) has raised the minimum daily Cash Reserve Ratio (CRR) maintenance requirement for scheduled banks from 90% to 99% of the prescribed CRR. The change starts from the reporting fortnight beginning October 16, 2026. The RBI announced it on October 9, 2026. The overall CRR stays unchanged at 3%.

What Is the Cash Reserve Ratio (CRR)?

CRR is the share of a bank’s Net Demand and Time Liabilities (NDTL) that it must keep as cash with the RBI. The RBI sets it under the Reserve Bank of India Act, 1934, and all scheduled commercial banks must follow it.

What Is the New Daily CRR Maintenance Requirement?

Earlier, banks had to keep at least 90% of the required CRR on every day of a reporting fortnight. They only had to meet the full CRR on average over the fortnight. From October 16, the daily minimum rises to 99%.

1. Old daily minimum: 90% of prescribed CRR
2. New daily minimum: 99% of prescribed CRR
3. Overall CRR rate: Unchanged at 3% of NDTL
4. Effective from: Fortnight beginning October 16, 2026

Why Is RBI Increasing the Daily CRR Requirement?

The main reason is to absorb excess money from the banking system. Surplus liquidity stood at about ₹3.88 lakh crore as of October 8. Part of this surplus came from higher dollar deposits raised under the RBI’s FCNR-B deposit scheme, which ended on August 31, 2026. FCNR-B accounts let eligible non-resident Indians hold term deposits in permitted foreign currencies.

Other Liquidity Measures by RBI

• Repo rate hike: On October 7, the RBI raised the policy repo rate by 25 basis points to 5.50%. A basis point is one-hundredth of a percentage point, so this is a 0.25 percentage point rise.
• OMO sale: The RBI scheduled an Open Market Operation sale of government securities worth ₹25,000 crore on October 13. In an OMO sale, the RBI sells government securities, which pulls money out of the banks.

What Will Be the Impact of the Rise in Daily CRR Maintenance Requirement?

• The new rule is expected to absorb an additional ₹1 lakh crore from the banking system.
• Banks will have less room to fall short of the required cash reserve on individual days.
• Together with the repo rate hike and the OMO sale, it will help tighten surplus liquidity.