What changed
Previously, all FCNR(B) and NRE deposits were included in NDTL for CRR/SLR computation. Now, incremental deposits of 3 years or more, over the July 26, 2013 base, are exempt from CRR/SLR and excluded from ANBC for priority sector lending. Transfers from NRO to NRE accounts do not qualify for this exemption.
What it means for you
Banks can now raise longer-term foreign currency and NRE deposits without the cost of maintaining CRR/SLR, freeing up funds for lending. This also reduces the priority sector lending burden by excluding advances against these deposits from ANBC. It incentivizes banks to attract stable, long-term NRI deposits.
What you must do
- Identify the base date (July 26, 2013) for FCNR(B) and NRE deposit balances.
- Track incremental deposits with maturity of 3 years or more from this base.
- Exclude these qualifying deposits from NDTL for CRR/SLR maintenance.
- Exclude advances against these deposits from ANBC for priority sector targets.
- Ensure NRO to NRE transfers are not counted for exemptions.
Who it affects
All scheduled commercial banks (excluding RRBs), Treasury and ALM teams, Priority sector lending compliance teams, NRI deposit product managers
What is the base date for calculating incremental deposits?
The base date is July 26, 2013. Only deposits above the balance on that date qualify for exemptions.
Do transfers from NRO to NRE accounts qualify for the exemption?
No, such transfers are explicitly excluded from the exemption.
How does this affect priority sector lending calculations?
Advances made in India against these exempt deposits are excluded from Adjusted Net Bank Credit (ANBC), reducing the base for priority sector targets.