RBI’s 2025 CRR & SLR Framework for Payments Banks – A Practical Compliance Handbook

The Reserve Bank of India has issued the Reserve Bank of India (Payments Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025, laying down a comprehensive framework on how Payments Banks (PBs) must compute, maintain and report their Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).

This article recasts the Directions into a practitioner-friendly format, explaining what Payments Banks must do, how to compute NDTL, what qualifies as eligible assets, and the consequences of non-compliance.

These Directions are issued under Section 35A of the Banking Regulation Act, 1949, read with Section 42 of the Reserve Bank of India Act, 1934 and Sections 18 and 24 of the Banking Regulation Act, 1949.

1. Scope, Commencement and Coverage

1.1 Short title and enforcement

  • The Directions are titled “Reserve Bank of India (Payments Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025”.
  • They come into force immediately from the date of issue, i.e., November 28, 2025.

1.2 Applicability

  • The Directions apply exclusively to Payments Banks.
  • For ease of reference:
    • Collectively: ‘banks’ or ‘PBs’
    • Individually: ‘bank’ or ‘PB’

1.3 Statutory reporting formats

  • CRR compliance must be reported through Form A.
  • SLR compliance must be reported through Form VIII.

These statutory returns are the backbone of RBI’s monitoring of reserve and liquidity compliance for PBs.

2. Key Definitions Relevant for CRR & SLR Compliance

The Directions standardise several expressions used in computation of CRR, SLR and NDTL. Payments Banks must adopt these meanings precisely.

2.1 Aggregate deposits and savings apportionment

  • Aggregate Deposits:
    Total of demand deposits and time deposits.

  • Apportionment of Savings Bank balances between demand and time liabilities:

    1. As on March 31 and September 30 each year, PBs must compute the proportion of savings deposits that represent demand and time liabilities in line with Regulation 7 of The Reserve Bank of India Scheduled Banks’ Regulations, 1951.
    2. For each account, the average of monthly minimum balances during the half-year is treated as the time liability component.
    3. The difference between:
      • the average of actual balances during the half-year, and
      • the average of monthly minimum balances,
        is treated as the demand liability portion.
    4. These derived proportions (demand vs time) are then applied to all savings bank balances for every reporting fortnight in the subsequent half-year.

2.2 Approved securities / SLR securities

“Approved securities” (commonly understood as SLR securities) include:

  1. Dated Government of India securities under the market borrowing programme and Market Stabilization Scheme.
  2. Treasury Bills of the Government of India.
  3. State Development Loans (SDLs) issued by State Governments under their market borrowing programme.
  4. Any other instrument specifically notified by RBI.

For Form A, PBs must report total investments in approved securities as per the investment book, including encumbered holdings.

For SLR, only the unencumbered component of such securities qualifies as eligible SLR assets, with these clarifications:

  • The following categories are not treated as encumbered for SLR:
    • Securities lodged with another institution as security where the facility has not yet been drawn or availed to that extent.
    • Securities kept as collateral with RBI for availing liquidity under Marginal Standing Facility (MSF), up to the permissible percentage of NDTL derived out of SLR holdings.
    • Securities acquired under RBI-LAF and market repo transactions.

2.3 Assets with the banking system

“Assets with Banking System” include:

  • Balances in current accounts with banks.
  • Balances with banks / notified financial institutions in other accounts.
  • Funds provided to the banking system as loans or deposits repayable at call or up to a fortnight.
  • Other loans extended to the banking system.
  • Any other dues from the banking system which do not fit into the above categories but arise from dealings with banks / notified institutions.

2.4 Other important terms

Some critical expressions used repeatedly in the Directions:

  • Average daily balance:
    Simple average of closing balances for each day of a fortnight.

  • Bank credit in India:
    All outstanding loans and advances, including advances with provisioning or refinance, but excluding:

    • Rediscounted bills without recourse, and
    • Advances written off at Head Office level (technical write-offs).

  • Cash for CRR:
    Includes:

    • Cash in hand,
    • Net current account balance with other scheduled commercial banks in India,
    • Deposit under Section 11(2) of the Banking Regulation Act, 1949 kept with RBI by foreign-incorporated banks,
    • Any balance maintained with RBI over and above statutory balances under Section 42 of RBI Act, 1934,
    • Balances held with RBI under Standing Deposit Facility (SDF).

  • Cash in India / Cash in hand:
    Rupee notes and coins with branches, ATMs, cash deposit machines and Business Correspondents (BCs), including transit cash recorded in the books, but excluding:

    • Cash physically with outsourced vendors / BCs not reflected in the bank’s books or not replenished into ATMs.

  • Deemed Cash (for SLR):
    Treated as cash for SLR and includes:

    • Cash in hand (as defined above),
    • Section 11(2) RBI deposits of foreign banking companies,
    • Excess balances with RBI over Section 42 requirement,
    • Net current account balances with other scheduled commercial banks,
    • SDF balances with RBI.

  • Demand Deposit:
    Any deposit payable on demand, including:

    • Current accounts,
    • Demand part of savings accounts,
    • Credit balances in overdrafts / cash credits,
    • Deposits at call, overdue deposits, cash certificates, etc.

  • Demand Liabilities:
    Liabilities payable on demand, covering:

    • Current account balances,
    • Demand portion of savings accounts,
    • Margins against LCs / guarantees (payable on demand),
    • Overdue fixed / recurring / cumulative deposits and cash certificates,
    • Outstanding TTs, MTs, DDs,
    • Unclaimed deposits,
    • Credit balances in cash credit accounts,
    • Deposits taken as security for advances, if repayable on demand.

Money at call and short notice from outside the banking system must be shown as liability to others.

  • Fortnight:
    Period from Saturday after a reporting Friday up to the second following Friday, both days inclusive.

  • Other Demand and Time Liabilities (ODTL):
    Includes:

    • Interest accrued but not paid on deposits,
    • Bills payable, unpaid dividends, suspense items due to others, net credit in branch adjustment accounts, dues to the banking system not in the nature of deposits/borrowings,
    • Certain aged credit entries in inter-branch accounts, margin money on purchased/discounted bills, and gold borrowed from abroad (converted into rupees using London AM Gold/USD and FBIL USD/INR reference rate),
    • Borrowings through instruments qualifying as Upper Tier 2 and Tier 2 capital.