RBI Scraps Periodic Reporting Requirements for Authorised Dealer Banks on Non-Resident Bank Rupee Accounts
Overview
The Reserve Bank of India has issued a fresh directive simplifying the compliance landscape for Authorised Dealer Category-I banks. Through A.P. (DIR Series) Circular No. 20 dated September 02, 2026, the RBI has formally done away with two specific reporting obligations that were previously applicable to AD Category-I banks in connection with Rupee accounts held by non-resident banks. This move reflects the regulator's ongoing effort to rationalise the compliance framework governing foreign exchange operations.
The circular, titled "Deposits and Accounts – Accounts of Non-resident banks", is addressed to all Authorised Dealer Category-I banks and carries immediate effect from its date of issue, i.e., September 02, 2026.
Regulatory Background: What the Earlier Framework Required
To appreciate the significance of this circular, it is important to first understand the reporting obligations it has now removed.
The earlier regulatory framework governing these accounts was set out in Para B.2(ii) and B.8(i) of Part B of A.P. (DIR Series) Circular No. 92 dated April 4, 2003. Under that framework, AD banks were required to fulfil the following two obligations:
1. Annual Branch-Wise Reporting of Rupee Accounts
Every AD Category-I bank was obligated to compile and submit an up-to-date list of all its offices and branches that maintained Rupee accounts of non-resident banks. This list was to reflect the position as at the end of December each year and had to be furnished to the Central Office of the Reserve Bank of India before January 15 of the following year. In effect, this was a periodic annual submission intended to keep the RBI informed about the spread of Rupee account facilities extended to non-resident banks across domestic banking infrastructure.
2. Reporting of Excess Temporary Overdrawals
The second reporting obligation related to temporary overdrawals by overseas branches or correspondent banks beyond the permissible limit. Where such excess overdrawals were not brought within the permissible threshold within five days, the AD bank was required to report the same to the Central Office of the Reserve Bank of India. This was a compliance-triggered reporting mechanism designed to ensure that short-term breaches of overdraft limits did not go unmonitored.
The RBI's Decision: Both Requirements Dispensed With Immediately
Following an internal review of the existing regulatory requirements, the Reserve Bank of India has decided to dispense with both the above-mentioned reporting obligations with immediate effect from September 02, 2026.
The key points of the change are summarised below: