What changed
Previously, only RRBs meeting full viability criteria could open/maintain NRO/NRE rupee accounts and accept FCNR deposits. This circular permits the Empowered Committee to examine cases of RRBs with negative networth but consistent net profits for the last three years, and recommend them to RBI's Central Office for authorisation.
What it means for you
This gives struggling but profitable RRBs a pathway to offer foreign currency and NRI accounts, potentially boosting their deposit base and fee income. Banks must now prepare detailed financials and supervisory comfort evidence for committee review, adding compliance overhead but opening new revenue streams.
What you must do
- Review your RRB's net profit track record for the last three financial years.
- If networth is negative but profits are consistent, prepare a case for the Empowered Committee with supervisory comfort documentation.
- Engage with your sponsor bank or regional office to coordinate the application process.
- Update internal policies and systems to handle NRO/NRE/FCNR account operations if authorisation is granted.
Who it affects
Regional Rural Banks with negative networth, RRBs earning net profits for three consecutive years, Empowered Committee members, RBI Central Office (RPCD)
What is the key eligibility change for RRBs under this circular?
RRBs with negative networth but net profits for the last three years can now be considered for NRO/NRE/FCNR authorisation on a case-by-case basis by the Empowered Committee.
Does this circular apply to all RRBs automatically?
No, it only applies to RRBs that apply and are recommended by the Empowered Committee; it is not an automatic approval.
What documents should an RRB prepare for this application?
Financial statements showing net profits for three years, networth details, and evidence of supervisory comfort as assessed by the Empowered Committee.