What changed
Previously, all FCNR(B) and NRE deposits were included in NDTL for CRR/SLR. Now, only incremental deposits (over the July 26, 2013 base) with 3+ year maturity are exempt from these reserve requirements.
What it means for you
This frees up funds for banks, as they don't need to set aside reserves for these specific long-term foreign currency and NRE deposits. It incentivizes banks to mobilize longer-tenor NRI deposits, improving their liability profile and reducing reserve costs.
What you must do
- Calculate incremental FCNR(B) and NRE deposits using July 26, 2013 as base date.
- Exclude deposits with 3+ year maturity from NDTL for CRR/SLR computation.
- Ensure NRO-to-NRE transfers are not counted for this exemption.
- Update internal systems to track base date and maturity for compliance.
Who it affects
Regional Rural Banks (RRBs), Scheduled State Cooperative Banks (StCBs), NRI deposit operations teams, Treasury and compliance departments
What is the base date for calculating incremental deposits?
The base date is July 26, 2013. Only deposits above that level, with 3+ year maturity, qualify for exemption.
Do transfers from NRO to NRE accounts qualify for this exemption?
No, such transfers are explicitly excluded from the CRR/SLR exemption.