RBI exempts swap-eligible FCNR(B) deposits at small finance banks from CRR and SLR
Small finance bank treasury and regulatory-reporting teams must apply the CRR/SLR exemption to swap-eligible fresh FCNR(B) deposits from the reporting fortnight beginning 1 July 2026 and update Form A reporting accordingly
Change
On 8 June 2026, the Reserve Bank of India (RBI) issued the Small Finance Banks CRR/SLR Second Amendment Directions, 2026, exempting fresh three-to-five-year FCNR(B) deposits mobilised between 8 June and 30 September 2026 from CRR and SLR maintenance; the directions are effective immediately, with the CRR exemption applying from the reporting fortnight beginning 1 July 2026.
Why it matters
The exemption covers fresh FCNR(B) deposits of three-to-five-year tenor (including renewals) mobilised by small finance banks between 8 June and 30 September 2026, and applies to the original deposit amounts for as long as they are held on the bank's books. The CRR exemption runs from the reporting fortnight beginning 1 July 2026, based on the NDTL computation as on 15 June 2026, and subsequent fortnights. The amendment inserts paragraph 20(6), updates the paragraph 29(5) cross-reference, and revises Form A Annex A reporting (new item VIII.7 'FCNR(B) – 2026 [Para 20(6)]'). It is the SFB-specific counterpart to the same-day commercial-banks CRR/SLR exemption and complements the FCNR(B) swap facility.
Implications
- — Small finance bank treasury and asset-liability teams must exclude qualifying fresh three-to-five-year FCNR(B) deposits (mobilised 8 June–30 September 2026) from CRR and SLR maintenance from the reporting fortnight beginning 1 July 2026, or over-maintain reserves and forgo the funding-cost benefit.
- — SFB regulatory-reporting teams must update NDTL and reserve computations from the 15 June 2026 base date and revise Form A Annex A to capture the new item VIII.7 'FCNR(B) – 2026 [Para 20(6)]', or file reserve returns that misclassify the exempt deposits.
- — SFBs must track that the exemption attaches only to the original deposit amounts of qualifying deposits for as long as they remain on the books, and only to deposits mobilised within the 8 June–30 September 2026 window, or misapply the exemption to ineligible balances.
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