RBI circular dated February 05, 2021 directs banks to maintain records of Credit extended to MSME Entrepreneurs to avail deduction in Cash Reserve Ratio (CRR). The Statement on Developmental and Regulatory Policies of February 5, 2021 provides that the Scheduled Commercial Banks will be allowed to deduct the amount equivalent to credit disbursed to ‘New MSME borrowers’ from their Net Demand and Time Liabilities (NDTL) for calculation of the Cash Reserve Ratio (CRR).
Banks are required to report the exemption availed at the end of a fortnight, as per Master Circular on Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) dated July 1, 2015, under the item “Any other liabilities coming under the purview of zero prescription”. Proper fortnightly records of credit disbursed to new MSME borrowers/CRR exemption claimed, duly certified by the Chief Financial Officer (CFO) or an equivalent level officer, must be maintained by banks for supervisory review.
