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CRR/SLR Exemption for Long-Term FCNR(B) and NRE Deposits

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2013-14/203 · issued 27 Aug 2013 · ~2 min read
Quick answerIncremental FCNR(B) and NRE deposits with maturity of 3 years or more, over the July 26, 2013 base, are exempt from CRR/SLR and excluded from ABC for priority sector lending, effective August 24, 2013.

What changed

Previously, all FCNR(B) and NRE deposits were included in NDTL for CRR/SLR computation. Now, incremental deposits of these types with a maturity of 3 years or more, measured against the July 26, 2013 base, are exempt from CRR/SLR requirements. Additionally, advances funded by such exempt deposits are excluded from Adjusted Bank Credit for priority sector lending targets.

What it means for you

Urban cooperative banks can now raise long-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 for advances backed by these deposits, offering more flexibility in asset allocation. Banks should see improved net interest margins on these specific deposit products.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

All Primary (Urban) Co-operative Banks, Treasury and ALM teams, Priority sector lending compliance officers

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the base date for calculating incremental deposits?

The base date is July 26, 2013. Only deposits mobilised after this date, with a maturity of 3 years or more, qualify for the exemption.

Do transfers from NRO to NRE accounts qualify for the exemption?

No, any transfer from Non-Resident (Ordinary) accounts to NRE accounts will not qualify for CRR/SLR exemption.

How does this affect priority sector lending calculations?

Advances extended in India against the qualifying incremental FCNR(B)/NRE deposits are excluded from Adjusted Bank Credit, reducing the base for computing priority sector lending targets.

📜 Read the original circular — full text as issued by RBI
RBI/2013-14/203 UBD.BPD.(PCB) CIR No. 5/13.01.000/2013-14 August 27, 2013 The Chief Executive Officers All Primary (Urban) Co-operative Banks Dear Sir/Madam, Section 42(1) of the Reserve Bank of India Act, 1934 and Section 18 and 24 of the Banking Regulation Act, 1949 (AACS) – FCNR (B)/NRE deposits - Exemption from maintenance of CRR/SLR and exclusion from ABC for Priority Sector Lending At present, banks are required to include all Foreign Currency Non-Resident Bank [FCNR (B)] and Non-Resident (External) Rupee (NRE) deposit liabilities for computation of Net Demand and Time Liabilities (NDTL) and for maintenance of CRR and SLR. 2. Banks are advised that with effect from fortnight beginning August 24, 2013, incremental FCNR (B) deposits as also NRE deposits with reference to base date of July 26, 2013, and having maturity of three years and above, mobilised by banks will be exempt from maintenance of CRR and SLR. To amplify, if a bank had a total FCNR (B) deposit base of say USD 100 as on the base date, and mobilises an incremental deposit of say USD 20, that portion of USD 20 which has a maturity of 3 years and above will not be part of NDTL and will qualify for CRR and SLR exemption. The same principle will apply for calculation of NRE deposits for exemption from maintenance of CRR/SLR requirements. However, any transfer from Non-Resident (Ordinary) (NRO) accounts to NRE accounts will not qualify for such exemptions. 3. Further, advances extended in India against the incremental FCNR (B) / NRE deposits qualifying for exemption from CRR/SLR requirements as above, will also be excluded from Adjusted Bank Credit for computation of priority sector lending targets. Yours faithfully, (A.K.Bera) Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/203 · issued 27 Aug 2013. The plain-English explanation above is BankPulse’s own independent summary.
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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8349&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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