Scheduled Commercial Banks are required to maintain with RBI, an average cash balance, the amount of which shall not be less than 6% of the total of the Net Demand and Time Liabilities(NDTL) in India.
Demand Liabilities include all liabilities which are payable on demand and they include current deposits, demand liabilities portion of savings bank deposits, margins held against letters of credit/ guarantees, balances in overdue fixed deposits, cash certificates and cumulative/ recurring deposits, outstanding Telegraphic Transfers (TTs), Mail Transfer (MTs), Demand Drafts (DDs), unclaimed deposits, credit balances in the Cash Credit account and deposits held as security for advances which are payable on demand.
Time Liabilities are those which are payable otherwise than on demand and they include fixed deposits, cash certificates, cumulative and recurring deposits, time liabilities portion of savings bank deposits, staff security deposits, margin held against letters of credit if not payable on demand, deposits held as securities for advances which are not payable on demand, India Millennium Deposits and Gold Deposits.
The CRR is calculated on the basis of average of the daily balance maintained with RBI during the reporting fortnight. Scheduled Commercial Banks are required to maintain minimum CRR balances up to 70 per cent of the total CRR requirement on all days of the fortnight.