Penal rate of interest on shortfall in CRR and SLR up by 1 pc

Penal rate of interest on shortfall in CRR and SLR up by 1 pc
PRESS TRUST OF INDIA

MUMBAI, JULY 30: The penal rate of interest charged on the amount of shortfalls in the maintenance of cash reserve ratio (CRR) and statutory liquidity ratio (SLR) has been been revised upward by one per cent by the Reserve Bank of India in view of the one per cent hike in bank rate.

Due to the benchmark refinance rate going up from seven per cent to eight per cent per annum, effective July 21, the penal rate of interest on shortfalls in maintenance of CRR and SLR stands increased to 11 per cent as against 10 per cent previously for the first week of default by all scheduled commercial banks, a senior RBI official told PTI.

In the case of failure to maintain the CRR and SLR in the second week and subsequent weeks, the rate of penal interest would be 13 per cent as against the earlier 12 per cent.

The RBI, in a bid to stabilise the rupee, had on July 21 announced a one per cent increase in bank rate, a two stage increase in CRR by 50 basis points to 8.50 per cent and a two-stage 50 per cent reduction in refinance facilities available to banks.