RBI Narrows CRR and SLR Exemption Period for Commercial Banks: FCNR(B) & NRE Deposits

The Reserve Bank of India has issued the Reserve Bank of India (Commercial Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Fourth Amendment Directions, 2026 on August 25, 2026, significantly revising the time period during which commercial banks can claim CRR and SLR exemption on specified non-resident deposits.

This latest amendment adjusts the earlier relaxation granted under the Second and Third Amendment Directions, 2026, by advancing the cut-off date for eligible deposits from September 30, 2026 to August 31, 2026.

Commercial banks must now carefully reassess their regulatory reporting, liquidity planning, and deposit mobilisation strategies to ensure strict alignment with the revised time windows.

Regulatory Background: CRR and SLR Framework for Commercial Banks

Core Requirements Under the RBI and Banking Regulation Laws

The CRR and SLR maintenance obligations for commercial banks are grounded in the following statutory provisions:

  • Section 42 of the Reserve Bank of India Act, 1934 – governs Cash Reserve Ratio (CRR) requirements for scheduled banks.
  • Sections 18 and 24 of the Banking Regulation Act, 1949 – relate to Statutory Liquidity Ratio (SLR) and associated liquidity obligations.
  • Section 35A of the Banking Regulation Act, 1949 – empowers RBI to issue binding directions to banks in public interest.

Important: The Reserve Bank of India (Commercial Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025 form the principal regulatory framework, which is being modified periodically by subsequent amendment directions (Second, Third, and now Fourth).

Original Regulatory Relaxations on FCNR(B) and NRE Deposits

Under the earlier amendments to the 2025 Directions:

  1. Second Amendment Directions, 2026

    • Granted CRR and SLR exemption to:
      • Fresh FCNR(B) deposits with:
        • Minimum tenor: 3 years
        • Maximum tenor: 5 years
        • Coverage also extended to renewals on maturity
      • Deposits mobilised between:
        • June 8, 2026 and September 30, 2026

  2. Third Amendment Directions, 2026

    • Introduced similar CRR and SLR exemption for:
      • Fresh Non-Resident (External) Rupee (NRE) term deposits of 3 years or more
      • Also covering renewed deposits upon maturity
      • Deposits mobilised between:
        • June 19, 2026 and September 30, 2026

The Fourth Amendment Directions, 2026 now shorten these exemption windows, requiring immediate compliance action by commercial banks.

Key Change Introduced by the Fourth Amendment Directions, 2026

Core Policy Decision

The Fourth Amendment Directions provide that, upon review, the RBI has decided to replace the date “September 30, 2026” with “August 31, 2026” for both categories of exempt deposits.

This change directly affects:

  • FCNR(B) deposits covered under paragraph 20(8) of the principal Directions, 2025
  • NRE term deposits covered under paragraph 20(9) of the principal Directions, 2025

Revised Exemption Windows

Following the amendment, the revised periods eligible for CRR and SLR exemption are:

1.