Banks can now deposit more money in the central bank and earn interest on it. The central bank has initiated a new system for collecting permanent deposits and will provide the facility to keep any excess deposits with the central bank.
To qualify, banks must keep a minimum of 20 crores and can keep up to 5 crores or more, with the remainder being left at their discretion. The central bank has set a 3% interest rate for these deposits, and this facility will be available for four days. However, the central bank has also announced that in the event of public holidays falling on the payment date, an additional grace period will be provided for payment.
After accumulating funds in the local deposit facility, banks will not be able to calculate the amount in mandatory cash reserves. However, they will be able to calculate it based on the legal reserve ratio and the liquid asset ratio, as per the directive.