The Presidents/Chief Executives

All Banks/DFIs

Maintenance of Cash Reserve Requirements (CRR)

Please refer to DMMD Circular 20 of 2011, BSD Circular No. 29 of 2008 on the captioned subject.

In order to facilitate banks in context of their liquidity management, following amendments are being introduced in maintenance of Cash Reserve Requirement (CRR):

1. The reserve maintenance period will now be of two weeks starting from Friday and ending on Thursday of subsequent week.
2. Time and Demand Liabilities (TDL) as of close of business on Friday (first day of reserve maintenance period) will be taken into account for determination of required CRR. If Friday is a holiday then TDL as of close of business on preceding working day will be taken into account.
3. All banks (including Islamic Banks/Branches) have to maintain CRR at an average of 5.0% of total demand liabilities (including time deposits with tenor of less than 1 year) during the reserve maintenance period, however daily minimum requirement is being decreased to 3.0%. Time liabilities (including time deposits with tenor of 1 year and above) will continue to be exempt from cash reserves.
4. DFIs will continue to maintain CRR at 1.0% of their time and demand liabilities during the reserve maintenance period.

The above instructions will be effective from October 12, 2012. The TDL to be used for CRR maintenance period starting from October 12, 2012 and ending on October 25, 2012 would be as of October 12, 2012. All other instructions on the subject shall, however, remain unchanged.