BE/RBINOTE/8/2020
What does the RBI notification recently released say?
- Banks can claim first deduction of amount equal to incremental credit disbursed as retail loans to specific sectors from NDTL of 14 Feb
- The amount of incremental credit outstanding from Jan-July 2020 shall be eligible for deduction from NDTL to compute CRR for five years
- This means that the banks are now permitted to avail themselves of CRR exemption for five years for incremental credit extended to automobiles, residential housing, micro, small and medium enterprises (MSMEs) between 31 Jan-31 July, 2020.
- Banks can claim first deduction from net demand and time liabilities (NDTL) of 14 February towards CRR margin
- This is said to be due to Reserve Bank’s revitalising the flow of bank credit to productive sectors having multiplier effects to support growth impulses
- Further, the RBI notification also adds that the Banks should now report the exemption availed at the end of a fortnight under “Exemptions/Others” in the Section-42 return, prescribed in Annex A to Form A as per Master Circular on Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) dated July 1, 2015.”
No Comments