Relaxation on CRR calculations: RBI issues additional clarifications

Reserve Bank of India, RBI, RBI clarification on cash reserve ratio. CRR calculations

RBI also clarified that repayments and non-performing assets would be deducted from the incremental credit. (File)

The Reserve Bank of India (RBI) on Wednesday issued further clarifications on the recently announced relaxation on cash reserve ratio (CRR) calculations for incremental credit extended for automobiles, residential housing and micro, small and medium enterprises (MSMEs).

The central bank explained that to calculate the incremental credit, the outstanding retail loans to the specified segments as on every reporting Friday beginning February 14 up to that of July 31, 2020 will be deducted from the outstanding credit to the specified segments as on January 31.

“If the difference between the outstanding credit is positive, the equivalent amount of difference (should) be deducted from NDTL (net demand and time liabilities) for the purpose of CRR maintenance. If the difference in credit to any of the specified segment is negative, it should be ignored,” RBI said. Lenders were awaiting further clarification on the specifics of the CRR exemption announced on February 6 during RBI’s bimonthly policy review.

RBI also clarified that repayments and non-performing assets would be deducted from the incremental credit. —FE