New Delhi, Feb 11 (KNN) The Reserve Bank of India (RBI) has announced that banks need not maintain the cash reserve ratio (CRR) on new loans given between January 31 and July 30 for Micro Small and Medium Enterprises (MSMEs), autos and homes for a period of five years.

''The Reserve Bank is actively engaged in revitalising the flow of bank credit to productive sectors having multiplier effects to support growth impulses.

Accordingly, the banks are allowed to deduct the equivalent amount of incremental credit disbursed by them as retail loans to automobiles, residential housing, and loans to MSMEs, over and above the outstanding level of credit to these segments as at the end of the fortnight ended January 31, 2020 from their net demand and time liabilities (NDTL) for maintenance of the cash reserve ratio (CRR), the apex bank said in its notification on Monday.

''Banks are advised that they can claim the first such deduction from the NDTL of February 14, 2020 for the amount equivalent to the incremental credit extended to the sectors indicated above over the outstanding level of credit as at the end of the fortnight ended January 31, 2020,'' the notifications read.

The RBI had said last Friday that banks need not downgrade the classification of commercial real estate assets where the project has been delayed for reasons beyond the promoter’s control for another year.

“An amount equivalent to the incremental credit outstanding from the fortnight beginning January 31, 2020 and up to the fortnight ending July 31, 2020 will be eligible for deduction from net demand and time liabilities (NDTL) for the purpose of computing the CRR for a period of five years from the date of origination of the loan or the tenure of the loan, whichever is earlier,” the RBI said.

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