CRR 3.00% · SLR 18.00% · Repo 5.25% · 01-Apr-2026
Since Dec 2025
Since Apr 2020
Since Dec 2025
Since Dec 2025
Every bank in India is required to keep a portion of its total deposits as cash with the RBI. That portion is the CRR. Right now, it's 3.00%.
Here's the catch — banks earn absolutely nothing on this money. It just sits there. So when RBI raises CRR, it's essentially saying: "You have too much money sloshing around. Park more of it with us." And when they cut it, they're releasing cash back into the system for banks to lend.
Say HDFC Bank has ₹100 crore in deposits. At 3.00% CRR, it must park ₹3.00 crore with RBI — no questions asked, no interest earned. The remaining ₹97.00 crore? That's what the bank has left for loans, investments, and everything else.
CRR is RBI's blunt instrument. A 0.50% hike across the banking system can suck out tens of thousands of crores overnight. It directly controls how much money banks have available to lend. More CRR = tighter credit = slower inflation. Less CRR = more lending = economic boost.
CRR was last changed in Dec 2025 — moved from 3.25% to 3.00%.
SLR is the percentage of deposits that banks must hold in safe, liquid assets — primarily government bonds, but also gold or cash. Currently 18.00%.
Unlike CRR, banks don't lose money on SLR. Government bonds pay interest, so this money is working for them. That's why SLR is considered a "softer" reserve requirement. It still limits how much banks can lend commercially, but it doesn't hit their bottom line nearly as hard as CRR does.
With SLR at 18.00%, a bank holding ₹100 crore in deposits must have at least ₹18.00 crore in government securities, gold, or cash. These assets can be sold quickly in a crunch — that's the "liquidity" part of the name.
SLR serves two masters. First, it keeps banks solvent by forcing them into safe assets. Second, it creates a captive buyer for government bonds — the government always has banks lined up to buy its debt. This is why SLR tends to stay high even when the economy is doing well.
SLR was last changed in Apr 2020 — moved from 18.25% to 18.00%.
Both are reserve requirements, but they work very differently.
| CRR (3.00%) | SLR (18.00%) | |
|---|---|---|
| Full form | Cash Reserve Ratio | Statutory Liquidity Ratio |
| What banks hold | Cash only | Govt bonds, gold, or cash |
| Held where | With RBI | With the bank itself |
| Earns interest? | No — dead money | Yes — govt bond coupons |
| Main purpose | Control money supply | Ensure solvency + fund govt debt |
| Legal basis | RBI Act 1934, Sec 42 | Banking Regulation Act 1949, Sec 24 |
| When RBI hikes it | Cash yanked out of system immediately | Banks shift lending to govt bonds (gradual) |
| Pain for banks | High — zero returns on locked cash | Low — bonds still pay interest |
Your EMI is tied to the Repo Rate (5.25%), not directly to CRR or SLR. But these ratios set the backdrop. When RBI hikes CRR, banks have less cash to lend. Even if the repo rate hasn't changed, banks might widen their lending spreads — which shows up as a slightly higher rate on your next loan. Think of CRR as the tide; repo rate is the wave.
When CRR drops and banks are flush with cash, they don't need your deposits as badly — so FD rates may come down. When CRR rises and liquidity gets tight, banks start competing for deposits by raising FD rates. If you've noticed FD rates moving even when the repo rate hasn't budged, this is often why.
Banks make money by lending. CRR and SLR directly reduce the pool of money available for lending. So when RBI unexpectedly cuts CRR, banking stocks tend to rally — more lendable cash means more interest income. HDFC Bank, ICICI, SBI and other Nifty heavyweights are especially sensitive to these changes since banking is a large chunk of the index.
Interactive 10-year charts for CRR, SLR, Repo Rate, and all RBI policy rates.
RBI Rate History ChartsData Source: Reserve Bank of India (RBI)