Rules / regulations / directions
Section 42 CRR — current statutory and RBI framework
Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026
Section 42 RBI Act + Banking Laws (Amendment) Act, 2025 + RBI CRR notification dated 6 June 2025 and current statutory returns/directions.
Scope, legal role and applicability
Current CRR working page connecting Section 42 with RBI’s notified CRR rate and the return/maintenance mechanics applicable on the event date. The bare Act PDF states amendment coverage only through Finance Act 2022, so later statutory/commencement changes must be sourced separately.
Operative requirements
- Confirm that the bank is included in the Second Schedule before applying Section 42.
- Use the RBI-notified CRR percentage in force for the relevant maintenance period; the June 2025 notification implemented staged reductions ending at 3.00%.
- Compute the balance on the statutory demand-and-time-liability base and apply the definitions/exclusions and RBI liability classifications relevant to the period.
- Use the current statutory definition of the maintenance/return period in force on the event date; do not rely on an older cycle merely because it remains in a pre-amendment consolidation.
- Track returns, daily balances, shortfall/penal consequences and any RBI relief/condonation separately.
- For inclusion/exclusion/name change in the Second Schedule, apply Section 42(6) and the operative RBI notification.
Records, forms and annexures
Preserve CRR notification, DTL/NDTL working, daily-balance record, statutory return, Second Schedule status evidence, shortfall computation and any RBI communication/condonation.
Practical advisory example
Facts and issue. A scheduled bank meets a 3% month-end snapshot but falls below the required average during the maintenance period. Compliance must be tested using the statutory/RBI average-balance mechanics, not the month-end figure.
Working method. Classify the entity/product, identify the exact paragraph in force on the event date, test exceptions and transitional provisions, then retain the evidence listed above. Do not rely on the title of the Direction or an old Master Direction version.
RBI Act / cross-law linkage
Official source and version control
Questions and answers
What is the main purpose of Section 42 CRR — current statutory and RBI framework?
Section 42 RBI Act + Banking Laws (Amendment) Act, 2025 + RBI CRR notification dated 6 June 2025 and current statutory returns/directions.
Which part of Section 42 CRR — current statutory and RBI framework should be checked first?
Start with scheduled-bank status and NDTL base and then apply this requirement: The Act supplies the CRR obligation and return architecture.
What record should be retained?
Use the RBI statutory return/reporting system applicable to scheduled banks; maintain the submitted return and underlying NDTL/CRR computation.
Does this page treat the RBI Act as the only enabling law?
No. Section 42 as amended by the Banking Laws (Amendment) Act, 2025, read with RBI’s June 2025 CRR notification reducing CRR to 3.0% in four tranches.