Multiple choice

Which is/are not true with regard to Smart City Brake Support (SCB) exemptions from maintaining Cash Reserve Ratio?

(i) Demand and Time Liabilities in respect of their Offshore Banking Units (ii) Liabilities to the banking system in India as computed (iii) Credit balances in ACU (USD) Accounts (iv) SCBs are required to include inter-bank term deposits/term borrowing liabilities of original maturities of 15 days and above

  1. (i) and (ii)

  2. (iii) only

  3. (iv) only

  4. (i), (ii), (iii) and (iv)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

SCBs are exempted from maintaining CRR on the following liabilities:

(i) Liabilities to the banking system in India as computed under Clause (d) of the explanation to Section 42(1) of the RBI Act, 1934;

(ii) Credit balances in ACU (USD) accounts;

(iii) Demand and Time Liabilities in respect of their Offshore Banking Units (OBU);and

(iv) SCBs are not required to include inter-bank term deposits/term borrowing liabilities of original maturities of 15 days and above and up to one year in "Liabilities to the Banking System". Similarly, banks should exclude their inter-bank assets of term deposits and term lending of original maturity of 15 days and above and up to one year in "Assets with the Banking System" (item III of Form A return) for the purpose of maintenance of CRR. The interest accrued on these deposits is also exempted from reserve requirements.

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