The Reserve Bank of India (RBI) announced on Friday, 9 October 2026, that banks will have to keep a larger part of their cash reserve with it every single day. The minimum daily balance goes up from 90% of the required Cash Reserve Ratio (CRR) to 99%, starting with the fortnight that begins on 16 October 2026.
The central bank said the step follows a review of liquidity conditions in the banking system. In its release, quoted by PTI, the RBI said "it has been decided to increase the minimum daily maintenance of the CRR from 90 per cent of the requirement to 99 per cent".
What exactly has changed
The CRR is the share of deposits that a bank must park with the RBI as cash. Banks do not have to hold the exact amount each day. The rule works on an average over a fortnight, with a floor for each day.
| Rule | Until October 15 | From the fortnight starting October 16 |
|---|---|---|
| Minimum balance on any single day | 90% of the required CRR | 99% of the required CRR |
| Average over the fortnight | Must meet the full CRR | Must meet the full CRR (no change) |
So the amount a bank has to hold on average stays the same. What shrinks is the room to run a lower balance on some days and make it up on others.
What has not changed
The CRR rate itself has not been raised. The announcement deals only with the daily floor. Reports of the release are clear that the "99%" figure is a share of the existing requirement, not a new reserve ratio.
Why the RBI did it
Banks are holding much more cash than they need. According to News On AIR and PTI, the surplus in the banking system stood at about Rs 3.88 lakh crore as of 8 October 2026. A higher daily floor makes banks keep more money locked with the RBI through the fortnight, which takes some of that surplus out of the overnight market.
A market note from Kotak Neo links part of the surplus to foreign currency deposits raised by banks and swapped for rupees, and to government spending at the end of the month. It also says the RBI has been using reverse repo auctions and open market operations over the past two months for the same purpose. Those points are that note's reading, not the RBI's stated reasons.
The move comes days after the RBI tightened rupee derivative rules and opened a dollar window for oil companies.
Key points for readers
- This is a rule for banks' accounts with the RBI. It does not change anything in a customer's savings account, fixed deposit or loan agreement.
- The RBI has not announced any change in the repo rate or the CRR rate with this step.
- Whether short-term rates in the money market move, and by how much, will be seen only after October 16. The RBI has not given any estimate.
- The rule applies from the reporting fortnight that starts on 16 October 2026 and stays until the RBI changes it.
What happens next
Banks have a few days to adjust their daily cash planning before the new floor applies. The RBI has not said how long the 99% requirement will stay in place.
