RBI/2016-17/83
DBR.No.Ret.BC.15/12.02.001/2016-17
October
13, 2016
All Commercial Banks, Primary
(Urban) Co-operative Banks (UCBs),
State and Central Co-operative Banks (StCBs/CCBs)
Dear Sir,
Section 24 and Section 56 of the
Banking Regulation Act, 1949 - Maintenance of Statutory Liquidity Ratio
(SLR)
Please refer to circulars DBR.Ret.BC.64/12.01.001/2015-16 dated December
10, 2015, on maintenance of Statutory Liquidity Ratio under Section
24 and Section 56 of the Banking Regulation Act, 1949.
2. It has been decided that the
SLR securities acquired from RBI under Liquidity Adjustment Facility (LAF)
shall be considered as eligible assets for SLR maintenance from October 3,
2016.
3. All scheduled commercial
banks, Primary (Urban) Co-operative Banks and State and Central
Co-operative Banks shall be guided by these guidelines. A copy of the
relative notification
DBR.No.Ret.BC.14/12.02.001/2016-17 dated October 13, 2016,
applicable to all these banks is enclosed.
4. Please acknowledge receipt.
Yours faithfully,
(S S Barik)
Chief General Manager-in-Charge
Encl: As above
DBR.No.Ret.BC.14/12.02.001/2016-17
October
13, 2016
NOTIFICATION
In exercise of the powers
conferred by sub-section (2A) of Section 24 read with Section 51 and
Section 56 of the Banking Regulation Act, 1949 (10 of 1949) and in partial
modification of the Notification
DBR.No.Ret.BC.63/12.01.001/2015-16 dated December 10, 2015, the
Reserve Bank hereby specifies that:
(i) with effect from the dates
given below, every scheduled commercial bank, local area bank, primary
co-operative bank, state co-operative bank and central co-operative bank
shall maintain in India assets (hereinafter referred to as ‘SLR assets’)
the value of which shall not, at the close of business on any day, be less
than:
(a) 20.75 per cent from October
1, 2016; and
(b) 20.50 per cent from January
7, 2017
of their total net demand and
time liabilities in India as on the last Friday of the second preceding fortnight,
valued in accordance with the method of valuation specified by the Reserve
Bank from time to time; and
(ii) such SLR assets shall be
maintained by:
A.
Scheduled commercial banks and local area banks, as -
(a) cash; or
(b) gold as defined in Section
5(g) of Banking Regulation Act, 1949 valued at a price not exceeding the
current market price: or
(c) unencumbered investment in
any of the following instruments [hereinafter referred to as Statutory
Liquidity Ratio securities (“SLR securities”)], namely:-
1.
Dated
securities of the Government of India issued from time to time under the
market borrowing programme and the Market Stabilization Scheme ; or
2.
Treasury
Bills of the Government of India; or
3.
State
Development Loans (SDLs) of the State Governments issued from time to time
under the market borrowing programme:
(d) the deposit and unencumbered
approved securities required, under sub-section (2) of section 11 of the
Banking Regulation Act, 1949(10 of 1949), to be made with the Reserve Bank
by a banking company incorporated outside India;
(e) any balance maintained by a
scheduled bank with the Reserve Bank in excess of the balance required to
be maintained by it under section 42 of the Reserve Bank of India Act,1934
(2 of 1934);
Provided that the instruments
referred to in items (1) to (3) above that have been acquired under reverse
repo with Reserve Bank of India, shall not be included as SLR securities
for the purpose of maintenance of SLR assets up to October 2, 2016. From
October 3, 2016 such securities acquired from Reserve Bank shall be
considered as eligible assets for SLR maintenance.
Provided further that the
following securities shall not be treated as encumbered for the purpose of
maintenance of SLR assets, namely:-
(a) securities lodged with
another institution for an advance or any other credit arrangement to the
extent to which such securities have not been drawn against or availed of;
(b) securities offered as
collateral to the Reserve Bank for availing liquidity assistance from
Marginal Standing Facility (MSF), upto the permissible percentage of the
total NDTL in India, carved out of the required SLR portfolio of the bank
concerned; and
(c) securities offered as
collateral to the Reserve Bank for availing liquidity assistance under
Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR).
B. Primary
(Urban) co-operative banks, as–
(a) Cash, or
(b) gold as defined in Section
5(g) of Banking Regulation Act, 1949 (AACS) valued at a price not exceeding
the current market price: or
(c) Unencumbered investment in
approved securities as defined in section 5(a) of the Banking Regulation
Act, 1949 (10 of 1949) read with section 56 thereof:
Provided that the instruments
that have been acquired under reverse repo with Reserve Bank of India,
shall not be included as SLR securities for the purpose of maintenance of
SLR assets up to October 2, 2016. From October 3, 2016 such securities
acquired from Reserve Bank shall be considered as eligible assets for SLR
maintenance.
Provided further that the
following securities shall not be treated as encumbered for the purpose of
maintenance of SLR assets, namely:-
(a) securities lodged with
another institution for an advance or any other credit arrangement to the
extent to which such securities have not been drawn against or availed of;
C. State
co-operative bank (StCB) and Central co-operative bank (CCB), as -
(a) cash, or
(b) gold as defined in Section
5(g) of Banking Regulation Act, 1949 (AACS) valued at a price not exceeding
the current market price:, or
(c) unencumbered investment in
approved securities as defined in Section 5(a) of the Banking Regulation
Act, 1949 (10 of 1949) read with Section 56 thereof.
Provided that the instruments
that have been acquired under reverse repo with Reserve Bank of India,
shall not be included as SLR securities for the purpose of maintenance of
SLR assets up to October 2, 2016. From October 3, 2016 such securities
acquired from Reserve Bank shall be considered as eligible assets for SLR
maintenance.
The securities lodged with
another institution for an advance or any other credit arrangement to the
extent to which such securities have not been drawn against or availed of.
Notwithstanding anything
contained hereinabove,
i. Unencumbered balances
maintained by a Central co-operative bank with the State co-operative bank
of the State concerned, in excess of the balance required to be maintained
by it under Section 18 of the Banking Regulation Act, 1949 (10 of 1949)
read with section 56 thereof;
ii. Any unencumbered term
deposits maintained by a Central cooperative bank with the State
co-operative bank of the State concerned; and
iii. Unencumbered term deposits
held by a State co-operative bank or a central co-operative bank with State
Bank of India or a subsidiary bank or a corresponding new bank or IDBI Bank
Ltd.
shall also be deemed to be
assets for the purpose of calculating the percentage specified under this
notification, till March 31, 2017. However, SLR on incremental NDTL over
the level as on July 25, 2014 shall be maintained by StCBs / CCBs in the
form of approved assets. Maintenance of SLR in the form of approved assets
on NDTL as on July 25, 2014 shall be as per the roadmap advised as under.
Date
|
Investment
in approved assets
|
March 31, 2016
|
10% of NDTL as on July 25,
2014 to be maintained in assets as mentioned at (c) above
|
From April 1, 2017
|
Entire SLR as prescribed by
RBI as on that date in assets as mentioned in (a) to (c) above
|
* RPCD circular RPCD.RCB.BC.No.16/07.51.020/2014-15 dated July 21,
2014
|
(Sudarshan Sen)
Executive Director
Explanation- For the purpose of
this notification,
(a) “cash” to be maintained by
i) Scheduled commercial banks
and local area banks shall include, in addition to cash in hand, the net
balance in current accounts with other scheduled commercial banks in India.
ii) Primary (urban) co-operative
banks shall include :
·
Any
balances maintained by a primary co-operative bank, which is a scheduled
bank, with the Reserve Bank in excess of the balance required to be
maintained by it under section 42 of the Reserve Bank of India Act, 1934 (2
of 1934);
·
Any
balances maintained by a primary co-operative bank, not being a scheduled
bank, with the Reserve Bank in excess of the balance required to be
maintained by it under Section 18 of the Banking Regulation Act, 1949 (10
of 1949) read with Section 56 thereof; and
·
“Net
balances in current accounts” as defined in the Explanation to sub-section
(1) of Section 18 of the Banking Regulation Act, 1949 (10 of 1949) read
with Section 56 thereof, in excess of the balance required to be maintained
by it under the said section.
iii) State co-operative bank or a
Central co-operative bank shall include –
·
Any
balances maintained by a State co-operative bank, which is a scheduled
bank, with the Reserve Bank in excess of the balance required to be
maintained by it under Section 42 of the Reserve Bank of India Act, 1934 (2
of 1934);
·
Any
balances maintained by a State co-operative bank or Central co-operative
bank, not being a scheduled bank, with the Reserve Bank in excess of the
balance required to be maintained by it under Section 18 of the Banking
Regulation Act, 1949 (10 of 1949) read with Section 56 thereof; and
·
“Net
balances in current accounts” as defined in the Explanation to sub-section
(1) of section 18 of the Banking Regulation Act, 1949 (10 of 1949) read
with section 56 thereof, in excess of the balance required to be maintained
by it under the said Section.
(b) “Facility to Avail Liquidity
for Liquidity Coverage Ratio” shall mean facility whereby banks will be
permitted to reckon government securities held by them up to a certain per
cent of their NDTL within the mandatory SLR requirement as level 1 High
Quality Liquid Assets (HQLA) for the purpose of computing their Liquidity
Coverage Ratio (LCR).
(c) “Liquidity Adjustment
Facility” shall mean Repo auctions (for injection of liquidity) and reverse
repo auctions (for absorption of liquidity) conducted by the Reserve Bank
of India.
(d) “Local area bank” shall mean
a banking company licensed as such under Section 22 of the Banking
Regulation Act, 1949 (10 of 1949).
(e) “Marginal standing facility”
shall mean the facility under which the eligible entities can avail
liquidity support from the Reserve Bank against SLR securities, up to a
certain per cent of their respective NDTL outstanding at the last Friday of
the second preceding fortnight.
(f) "Market borrowing
programme" shall mean the domestic rupee loans raised by the
Government of India and the State Governments from the public and managed
by the Reserve Bank through issue of marketable securities, governed by the
provisions of the Government Securities Act, 2006, Public Debt Act, 1944
and the Regulations framed under those Acts, through an auction or any
other method, as specified in the notification issued in this regard.
(g) “Scheduled commercial bank”
shall mean a banking company included in the Second Schedule to the Reserve
Bank of India Act, 1934 (2 of 1934) and includes the State Bank of India,
subsidiary bank, corresponding new bank and Regional Rural Bank.
(h) “State Co-operative Bank”
shall mean the Principal Co-operative Society in a State, the primary
object of which is the financing of other Co-operative Societies in the
State:
Provided that in addition to
such Principal Society in a State, or where there is no such Principal
Society in a State, the State Government may declare any one or more
Co-operative Societies carrying on business in that State to be also or to
be a State Co-operative Bank or State Co-operative Banks within the meaning
of this definition;
(i) “Central Co-operative Bank”
shall mean the Principal Co-operative Society in a district in a State, the
primary object of which is the financing of other Co-operative Societies in
that district:
Provided that in addition to
such Principal Society in a district, or where there is no such Principal
Society in a district, the State Government may declare any one or more
Co-operative Societies carrying on the business of financing other
Co-operative Societies in that district to be also or to be a Central
Co-operative Bank or Central Co-operative Banks within the meaning of this
definition.
(j) “Primary Co-operative Bank”
shall mean a co-operative society, other than a primary agricultural credit
society,-
i.
the
primary object or principal business of which is the transaction of banking
business;
ii.
the
paid-up share capital and reserves of which are not less than one lakh of
rupees; and
iii.
the
bye-laws of which do not permit admission of any other co-operative society
as a member :
Provided that this sub-clause
shall not apply to the admission of a co-operative bank as a member by
reason of such co-operative bank subscribing to the share capital of such
co-operative society out of funds provided by the State Government for the
purpose.
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