Definition
Net Demand and Time Liabilities (NDTL)
Net Demand and Time Liabilities is the total of a bank's deposits and other liabilities used as the base for computing CRR and SLR requirements.
NDTL comprises demand liabilities (like current and savings deposits) and time liabilities (like fixed deposits), net of certain interbank items. The RBI requires banks to maintain the CRR and SLR as percentages of their NDTL.
Because NDTL is the denominator for these reserve requirements, its size determines how much cash a bank must keep with the RBI and how much it must invest in approved securities. Changes in deposits therefore directly alter a bank's mandatory reserves and lendable funds.
Related terms
- Deposits (Banking)Deposits are the funds customers place with a bank in current, savings and term accounts, forming the bank's primary and cheapest source of funding.
- Statutory Liquidity Ratio ImpactThe SLR impact refers to how the minimum share of deposits banks must hold in government securities and other approved assets affects their lending capacity and earnings.
- SLR (Statutory Liquidity Ratio)The SLR is the minimum share of their deposits that banks must keep parked in safe liquid assets like government securities, cash or gold before they can lend the rest.
- CRR (Cash Reserve Ratio)The CRR is the share of a bank's deposits it must park as cash reserves with the RBI, earning no interest, which the RBI adjusts to control liquidity in the banking system.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.