Now Reading: RBI raises daily CRR maintenance to 99%, Jefferies sees limited NIM impact
-
01
RBI raises daily CRR maintenance to 99%, Jefferies sees limited NIM impact
RBI raises daily CRR maintenance to 99%, Jefferies sees limited NIM impact
The Reserve Bank of India has raised the minimum daily Cash Reserve Ratio (CRR) maintenance requirement from 90% to 99%, effective from the fortnight beginning 16 October 2026. The RBI said the move follows a review of current liquidity conditions and aligns with the Monetary Policy Committee's ‘calibrated tightening’ stance. Banks must still maintain the full 3% CRR on average over the reporting fortnight.
Jefferies India analysts Prakhar Sharma and Vinayak Agarwal estimate that at 100% CRR maintenance, banks would hold Rs 8 lakh crore in CRR. A 5 to 10% lift in daily balances could drain Rs 40,000 to 80,000 crore of liquidity and add 1 to 2 basis points to cost of funds. The brokerage expects a limited impact on net interest margins, adding that lenders may pass on higher costs to borrowers. Jefferies maintains ‘Buy’ ratings on HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, SBI and PNB, with Bandhan Bank showing the highest upside at 47%.
Indian Opinion Analysis
The two reports present nearly identical coverage of the RBI's decision to raise daily CRR maintenance to 99%, with both attributing their core analysis to Jefferies. BusinessLine leads with the potential 'small dilution in banks’ net interest margins' and Jefferies' estimate of a 1-2 basis point impact on funding costs, while Economic Times foregrounds the RBI notification as a liquidity-curbing measure and then expands into Jefferies' stock-specific 'Buy' ratings on banks, including a 47% upside for Bandhan Bank. The difference is one of emphasis: BusinessLine frames the move as a marginal cost pressure that lenders can pass on, whereas Economic Times treats it as market-moving news, listing brokerage preferences and stock targets. Both agree the impact on margins is limited and the RBI's action aligns with the MPC's 'calibrated tightening' stance. The RBI's next step, stated in both reports, is the 99% daily maintenance requirement effective from the fortnight beginning 16 October 2026.
Coverage: 2 sources, 2 neutral
Sources (2): thehindubusinessline.com (neutral report), economictimes.indiatimes.com (neutral report)
This brief was synthesised by AI from the 2 sources linked above, so one read covers every framing they carry. Methodology and corrections.
