Current · Source: Reserve Bank of India · RBI/2013-14/478 · issued 31 Jan 2014 · ~2 min read
Quick answerRBI will withdraw CRR/SLR exemption on incremental FCNR(B) and NRE deposits (3+ years maturity) from March 8, 2014. Deposits outstanding as on March 7, 2014 will retain exemption until maturity. Advances against these deposits remain excluded from ANBC for priority sector targets.
The rule, in the simplest words
From March 8, 2014, banks must keep CRR (money kept with RBI) and SLR (money kept in safe investments) for new FCNR(B) (foreign currency deposits from non-residents) and NRE (rupee deposits from non-residents) deposits that are for 3 years or more.
Deposits that were already in the bank on March 7, 2014, still get the CRR/SLR exemption until they are taken out or mature.
Loans given using these special deposits do not count in ANBC (a measure for priority sector lending targets) until the loan is repaid.
How it plays out — a real example
An agri & priority-sector lending officer in Indore checks her bank's system on March 7, 2014, and sees a list of FCNR(B) deposits from July 26, 2013, that are still active. She makes sure these are marked to keep their CRR/SLR exemption until they mature, and she tells her team that from March 8, any new 3-year FCNR(B) deposit will need reserves set aside, but loans against the old ones still help meet priority sector targets.
What changed
The exemption from CRR and SLR maintenance on incremental FCNR(B) and NRE deposits (maturity of three years and above, base date July 26, 2013) will be withdrawn effective the reporting fortnight beginning March 8, 2014. Only the eligible amount outstanding as on March 7, 2014 will continue to enjoy the exemption until maturity or premature withdrawal. Advances extended against these deposits will still be excluded from Adjusted Net Bank Credit (ANBC) for priority sector lending computation until repayment.
What it means for you
Banks must prepare to resume CRR/SLR maintenance on new incremental FCNR(B) and NRE deposits from March 8, 2014, which will increase their reserve requirements and potentially reduce lendable resources. However, the continued exclusion of advances against these deposits from ANBC provides ongoing relief for priority sector lending targets, allowing banks to maintain their priority sector compliance without additional burden.
What you must do
Identify all incremental FCNR(B) and NRE deposits (3+ years maturity, base date July 26, 2013) outstanding as on March 7, 2014 and ensure CRR/SLR exemption is applied only to these until maturity.
Update internal systems to calculate CRR/SLR requirements from the fortnight beginning March 8, 2014, excluding only the grandfathered deposits.
Continue to exclude advances against these grandfathered deposits from ANBC for priority sector lending reporting until repayment.
Communicate the withdrawal timeline to treasury and compliance teams to avoid reserve shortfalls.
Who it affects
All scheduled commercial banks (excluding RRBs), Treasury departments managing CRR/SLR compliance, Priority sector lending reporting teams
❓ Common questions
Will all FCNR(B)/NRE deposits lose CRR/SLR exemption from March 8, 2014?
No. Only incremental deposits (base date July 26, 2013) with maturity of three years and above that are outstanding as on March 7, 2014 will retain the exemption until their maturity or premature withdrawal. New deposits after that date will not qualify.
Does the ANBC exclusion for priority sector lending also end on March 8, 2014?
No. Advances extended against the grandfathered deposits will continue to be excluded from ANBC until their repayment, even after the CRR/SLR exemption is withdrawn.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/478
Ref: DBOD.No.Ret.BC. 93 /12.01.001/2013-14
January 31, 2014
All Scheduled Commercial Banks
(Excluding Regional Rural Banks)
Dear Sir/ Madam
Section 42(1) of the Reserve Bank of India Act, 1934 and Section 24 of the Banking Regulation Act, 1949 - FCNR(B)/NRE deposits - Exemption from Maintenance of CRR/SLR and Exclusion from ANBC for Priority Sector Lending
Please refer to our circular DBOD.No.Ret.BC.36/12.01.001/2013-14 dated August 14, 2013 , on the captioned subject, wherein banks were advised that with effect from fortnight beginning August 24, 2013, incremental FCNR (B) deposits as also NRE deposits with reference base date of July 26, 2013, and having maturity of three years and above, mobilised by them will be exempt from maintenance of CRR and SLR. Further, advances extended in India against such incremental FCNR (B) / NRE deposits qualifying for exemption from CRR/SLR requirements will also be excluded from Adjusted Net Bank Credit (ANBC) for computation of priority sector lending targets.
2. On a review, and in order to give banks some time, it has been decided that the exemption granted on incremental FCNR (B)/NRE deposits from maintenance of CRR/SLR will be withdrawn with effect from reporting fortnight beginning March 8, 2014, i.e., only the eligible amount of incremental FCNR (B) and NRE deposits of maturities of three years and above from the base date of July 26, 2013, and outstanding as on March 7, 2014, would qualify for CRR/SLR exemption till their maturities/ pre-mature withdrawals.
3. Further, advances extended in India against the above mentioned incremental FCNR (B)/ NRE deposits, qualifying for exemption from CRR/ SLR requirements, will be eligible for exclusion from Adjusted Net Bank Credit, till their repayment, for computation of priority sector lending targets.
Yours faithfully,
(Sudha Damodar)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/478 · issued 31 Jan 2014. The plain-English explanation above is BankPulse’s own independent summary.
Update internal systems to calculate CRR/SLR requirements from the fortnight beginning March 8, 2014, excluding only the grandfathered deposits.
📜 Compliance
Identify all incremental FCNR(B) and NRE deposits (3+ years maturity, base date July 26, 2013) outstanding as on March 7, 2014 and ensure CRR/SLR exemption is applied only to these until maturity.
Continue to exclude advances against these grandfathered deposits from ANBC for priority sector lending reporting until repayment.
Communicate the withdrawal timeline to treasury and compliance teams to avoid reserve shortfalls.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (All scheduled commercial banks (excluding RRBs), Treasury departments managing CRR/SLR compliance, Priority sector lending reporting teams), your first concrete step on “FCNR(B)/NRE Deposit CRR/SLR Exemption Withdrawal Timeline” is: “Identify all incremental FCNR(B) and NRE deposits (3+ years maturity, base date July 26, 2013) outstanding as on March 7, 2014 and ensure CRR/SLR exemption is applied only to these until maturity.” (RBI issued this 31 Jan 2014).
Action required: Identify all incremental FCNR(B) and NRE deposits (3+ years maturity, base date July 26, 2013) outstanding as on March 7, 2014 and ensure CRR/SLR exemption is applied only to these until maturity.
Action required: Update internal systems to calculate CRR/SLR requirements from the fortnight beginning March 8, 2014, excluding only the grandfathered deposits.
Action required: Continue to exclude advances against these grandfathered deposits from ANBC for priority sector lending reporting until repayment.
Action required: Communicate the withdrawal timeline to treasury and compliance teams to avoid reserve shortfalls.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8726&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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