RBI Tightens Liquidity Norms, Raises Daily CRR Requirement to 99%
What Happened
Reserve Bank of India has increased the minimum daily maintenance requirement for the Cash Reserve Ratio (CRR) to 99% of the prescribed reserve, up from 90% currently. The new rule will take effect from the fortnight beginning October 16, 2026. Under the revised norm, banks will have less flexibility in managing day-to-day liquidity as they must maintain nearly the entire mandated CRR balance with the RBI every day.
Key Takeaways
The move strengthens liquidity discipline in the banking system by requiring banks to hold a larger portion of their mandatory cash reserves on a daily basis, reducing room for short-term fluctuations in reserve balances.