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RBI eases cash balance requirement for banks

Permits inclusion of now-defunct Rs 500 and Rs 1,000 notes as part of their cash balance

Press Trust of India  |  Mumbai 

A cashier stacks Indian currency notes inside a bank in Chandigarh (Photo: Reuters)
A cashier stacks currency notes inside a bank in Chandigarh. (Photo: Reuters)

The on Wednesday permitted banks to include now-defunct Rs 500 and 1,000 notes as part of their balance, a move that may provide relief to banks.

"In the wake of deposits of Specified Bank Notes (SBNs) in massive quantity, it has been decided that SBNs deposited in the chests since November 10 will be considered part of the balance in the soiled note category," said in a notification.

However, such deposits will not be reckoned for calculating balance limit or Holding Limit, it said.

The notification further said will review the decision in the second half of February.

According to analysts, the move will help banks adhere to RBI's sharp hike in CRR announced last week.

In a surprise move on November 26, raised the reserve ratio (CRR) of banks to 100 per cent of total deposits.

The higher CRR is applicable on incremental deposits raised between September 16 and November 11, 2016. That would mean deposits of Rs 3.2 lakh crore that accrued to banks during this period will be impounded by

First Published: Wed, November 30 2016. 19:32 IST