RBI eases cash reserve ratio norms for some deposits

The Reserve Bank of India said on Wednesday banks can exempt some foreign currency non-resident bank (FCNRB) deposits and non-resident external (NRE) rupee deposits when calculating their cash reserve and statutory liquidity ratios.

The RBI said in a statement that starting from the bi-weekly cycle starting on August 24, incremental three-year foreign FCNRB and NRE deposits with reference base dates of July 26 and above will be exempted from the cash reserve and statutory liquidity ratios.

The cash reserve ratio is the proportion of cash deposits banks have to keep with the central bank in cash and the statutory liquidity ratio is the proportion that lenders must buy into government securities.

Copyright: Thomson Reuters 2013