The Reserve Bank of India has raised the minimum daily cash reserve ratio (CRR) that banks must maintain from 90% to 99% of the prescribed requirement, effective from the reporting fortnight beginning 16 October 2026. The headline CRR stays at 3% of net demand and time liabilities (NDTL), so the change tightens daily compliance rather than the overall reserve rate.
The move comes with banking-system surplus liquidity of about ₹3.88 lakh crore, a figure reported by Kotak Neo and GKToday (as of 8 October 2026). Banks earn no interest on CRR balances.
What Does the Daily CRR Change Mean for Banks?
Earlier, banks could hold 90% of the prescribed CRR on any given day without penalty, provided they met the full requirement on average over the fortnight. Under the new norm, the permitted daily shortfall shrinks to 1%. CRR is the share of NDTL kept as cash with the RBI under the Reserve Bank of India Act, 1934.
How Much Liquidity Could Be Absorbed?
GKToday says the measure is expected to impound an additional ₹1 lakh crore from the banking system, while Kotak Neo cites unattributed estimates of ₹40,000-80,000 crore. The two figures differ and neither is an RBI statement, so the size of the impact remains uncertain. Kotak Neo also notes funding costs could rise by 1-2 basis points and that banks with thin liquidity buffers could feel more pressure.
What Is the Wider RBI Liquidity Context?
GKToday reports the RBI scheduled an open market operation sale of government securities worth ₹25,000 crore for 13 October 2026. An OMO sale absorbs liquidity. The article also links part of the surplus to higher dollar deposits under the FCNR-B scheme, which ended on 31 August 2026. The RBI’s stated purpose was not given in the sources reviewed.
Market and Trade Reaction
No bank-stock or bond-market reaction was found in the sources reviewed. Analysts’ estimates on funding cost impact are small, at 1-2 basis points, according to Kotak Neo.
What Happens Next?
Banks must now manage daily cash balances more tightly in each reporting fortnight. Watch for further OMO operations, the system liquidity surplus data and any RBI commentary on its liquidity stance.
Frequently Asked Questions
What is the new daily CRR requirement?
Banks must maintain at least 99% of the prescribed CRR every day, up from 90%, from the fortnight beginning 16 October 2026.
Has the CRR rate itself changed?
No. The CRR remains at 3% of net demand and time liabilities.
Do banks earn interest on CRR balances?
No. Banks earn no interest on cash held as CRR with the RBI.
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