RBI Issues Second Amendment Directions 2026: CRR and SLR Relief on Fresh FCNR(B) Deposits for Regional Rural Banks
Background and Context
The Reserve Bank of India has taken a significant policy step to boost the inflow of foreign currency into the Indian banking system. Through a formal directive issued on June 8, 2026, the RBI introduced the Reserve Bank of India (Regional Rural Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Second Amendment Directions, 2026, offering a time-bound regulatory concession to banks that mobilise fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits within a specified window.
This move is rooted in an announcement made by the RBI Governor on June 5, 2026, in which a USD-INR swap facility was proposed as a mechanism to attract dollar-denominated funds into the country. The Second Amendment Directions operationalise that commitment by carving out an exemption from the mandatory maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) for qualifying FCNR(B) deposits.
Governing Legal Framework
The Amendment Directions derive their authority from a robust statutory foundation. Specifically, the RBI has exercised powers under:
Section 35Aof the Banking Regulation Act, 1949Section 42of the Reserve Bank of India Act, 1934Sections 18 and 24of the Banking Regulation Act, 1949
The RBI, being satisfied that the issuance of these directions is necessary and expedient in the public interest, has proceeded to amend the existing Reserve Bank of India (Regional Rural Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025 (as updated on January 22, 2026).
What the Amendment Covers
Eligible Deposits
The exemption is available specifically for:
- Fresh FCNR(B) deposits mobilised by banks
- Deposits with a minimum tenor of three years and a maximum tenor of five years
- Deposits mobilised between June 8, 2026 and September 30, 2026
- Renewed deposits (i.e., existing deposits that are rolled over upon maturity during this period also qualify)
Important Note: The exemption applies only to the original deposit amounts. It continues to remain available for as long as the qualifying deposits are maintained on the books of the bank.