What changed
The RBI has added a new sub‑paragraph to the 2025 directions, stating that FCNR(B) deposits with tenors of three to five years, mobilised from June 8 to September 30 2026, are exempt from CRR and SLR. The CRR exemption starts with the reporting fortnight beginning July 1 2026, based on NDTL as of June 15 2026. The amendment also updates cross‑references in paragraph 29(4).
What it means for you
Rural co‑operative banks can now attract longer‑term foreign currency deposits without tying up funds for reserve requirements, improving liquidity and profitability. The exemption applies only to the original deposit amount and only while the funds stay on the books. Banks should adjust their NDTL calculations accordingly.
What you must do
- Identify all FCNR(B) deposits received between June 8 and September 30 2026 with tenors of three to five years.
- Exclude the original amounts of these deposits from CRR and SLR calculations from the July 1 2026 reporting fortnight onward.
- Update internal reporting systems to reflect the new exemption and ensure compliance with the revised paragraph references.
- Monitor the maturity and renewal of these deposits to maintain correct reserve treatment.
Who it affects
Rural co‑operative banks, Their FCNR(B) deposit customers, Regulatory reporting teams
Does the exemption apply to renewed FCNR(B) deposits?
Yes, deposits that are renewed upon maturity also qualify for the CRR/SLR exemption, as per the source.
What happens if a bank withdraws part of the exempted deposit before maturity?
The exemption is available only for the original deposit amounts while held in the bank books; any withdrawn portion would no longer be exempt, and the bank must resume CRR and SLR provisioning accordingly.
Do other types of foreign currency deposits receive the same exemption?
No, the exemption is limited to fresh FCNR(B) deposits with tenors of three to five years taken during the specified period.