RBI exempts three-year-plus NRE term deposits at Regional Rural Banks from CRR and SLR
Regional Rural Banks must exclude fresh three-year-plus NRE term deposits mobilised 19 June–30 September 2026 from CRR and SLR.
Change
The Reserve Bank of India (RBI) issued the Third Amendment Directions exempting fresh Non-Resident (External) Rupee (NRE) term deposits of tenor three years or more, mobilised between 19 June and 30 September 2026, from CRR and SLR maintenance, with immediate effect and operative from the reporting fortnight beginning 16 July 2026 (NDTL as on 30 June 2026).
Why it matters
Qualifying NRE term deposits are removed from the reserve base for as long as the original deposit amounts remain on bank books, lowering the statutory reserves RRBs must hold during the exemption window. Deposits created by transfer from NRO accounts do not qualify. The exemption is operative from the reporting fortnight beginning 16 July 2026, based on NDTL as on 30 June 2026, and RRBs must reflect it in the amended Annex A to Form A reserve return.
Implications
- — RRB treasury and reserve-accounting teams must exclude fresh NRE term deposits of tenor three years or more mobilised between 19 June and 30 September 2026 from CRR and SLR calculations from the reporting fortnight beginning 16 July 2026 — failing to apply the exemption produces incorrect statutory-reserve figures and supervisory non-compliance.
- — RRB deposit operations teams must distinguish original fresh NRE mobilisations from funds converted out of NRO accounts, because NRO-to-NRE transfers do not qualify — treating them as qualifying invalidates the reserve treatment.
- — RRB regulatory reporting teams must update Annex A to Form A (renumber item VIII.8 as VIII.9 and insert the new item VIII.8 'NRE Term deposits 2026 [para 20(6)]') in submitted reserve returns — failure to update produces mismatched reporting to the Reserve Bank.
Who is affected
- — Regional Rural Banks' treasury and reserve-accounting teams
- — Regional Rural Banks' deposit operations teams
- — Regional Rural Banks' regulatory reporting teams
What to watch
- — 16 July 2026: exemption operative from the reporting fortnight beginning this date, based on NDTL as on 30 June 2026.
- — 30 September 2026: last date for mobilising qualifying fresh NRE term deposits under the exemption window.