MPD Circular No. 03: Change of Cash Reserve Ratio (CRR)

Bangladesh Bank Chief Executive Office Motijheel, Dhaka-1000 Bangladesh

Monetary Policy Department MPD Circular No. 03 Date: April 09, 2020 26 Chaitra, 1426

Managing Director / Chief Executive Officer All Scheduled Banks Operating in Bangladesh (Including Islamic Shariah-based Banks)

Subject: Regarding Change of Cash Reserve Ratio (CRR)

Dear Sir,

In accordance with MPD Circular No. 01 dated March 23, 2020, all scheduled banks operating in Bangladesh (including Islamic Shariah-based banks) are currently required to maintain a minimum of 5.0 (five point zero) percent of their total demand and time liabilities as cash deposits with Bangladesh Bank on a bi-weekly average basis and a minimum of 4.5 (four point five) percent on a daily basis.

In order to counter the adverse impact of the novel coronavirus pandemic spreading globally on the national economy, and to ensure necessary liquidity in the money market as part of the implementation of various economic stimulus packages recently announced by the Honorable Prime Minister, it has been decided that the aforementioned Cash Reserve Ratio (CRR) will be reduced to a minimum of 4.0 (four point zero) percent on a bi-weekly average basis and a minimum of 3.5 (three point five) percent on a daily basis, effective from April 15, 2020.

This circular is issued under the powers conferred by Section 36(1) of the Bangladesh Bank Order, 1972 (Presidential Order No. 127 of 1972). In this regard, Notification No. MPD-116/2020-388 issued by Bangladesh Bank on April 09, 2020, is attached herewith for the information of all concerned.

Yours faithfully,

(Md. Zulhas Uddin) General Manager Phone: 9530059

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Bangladesh Bank Notification No. MPD-116/2020-388 Date: April 09, 2020 26 Chaitra, 1426

Notification

Pursuant to Section 36(1) of the Bangladesh Bank Order, 1972 (Presidential Order No. 127 of 1972), the amount of total demand and time liabilities that all scheduled banks operating in Bangladesh (including Islamic Shariah-based banks) are required to maintain as cash deposits with Bangladesh Bank, as prescribed, is hereby reduced from the existing minimum of 5.0 (five point zero) percent on a bi-weekly average basis and 4.5 (four point five) percent on a daily basis, to a minimum of 4.0 (four point zero) percent on a bi-weekly average basis and 3.5 (three point five) percent on a daily basis, under the powers conferred by the said Order.

2. This Order shall come into effect from April 15, 2020.

(S. M. Moniruzzaman) Deputy Governor