RRBs: CRR/SLR exemption on FCNR(B)/NRE deposits withdrawn from March 8, 2014
Current · Source: Reserve Bank of India · RBI/2013-14/486 · issued 11 Feb 2014 · ~2 min read
Quick answerRBI withdraws CRR/SLR exemption on incremental FCNR(B)/NRE deposits (3-year+ maturity) for RRBs from March 8, 2014. Only deposits outstanding as on March 7, 2014, retain exemption till maturity. Advances against these deposits remain excluded from priority sector lending targets till repayment.
The rule, in the simplest words
From March 8, 2014, any new FCNR(B) or NRE deposit that lasts 3 years or more (called incremental deposits) no longer gets a CRR (Central Bank Reserve Requirement) or SLR (Statutory Liquidity Ratio) exemption.
Only the deposits that were already on the books on March 7, 2014 keep the exemption until they finish their 3‑year term or are taken out early.
Loans that are made using those exempt deposits still do not count as priority sector lending until the loan is fully repaid.
Because of this change, Regional Rural Banks (RRBs) must now add all new FCNR(B)/NRE deposits to their CRR and SLR calculations, which will increase the amount of reserves they need to hold.
RRBs should update their internal systems, inform treasury and compliance teams, and keep the exempt deposits separate when computing priority sector lending targets.
How it plays out — a real example
A gold‑loan officer in Indore, named Rohan, receives a 5‑year FCNR(B) deposit from a customer. After March 8, 2014, Rohan learns that this deposit no longer gives him a CRR/SLR exemption, so he adjusts the bank’s reserve calculations and still keeps the loan counted as non‑priority until it is paid back.
What changed
The exemption from CRR and SLR maintenance on incremental FCNR(B) and NRE deposits (maturity 3 years and above, base date July 26, 2013) will be withdrawn from the reporting fortnight beginning March 8, 2014.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 such deposits will still be excluded from outstanding advances for priority sector lending targets for RRBs until repayment.
What it means for you
RRBs must now include incremental FCNR(B)/NRE deposits raised after March 7, 2014, in their CRR and SLR calculations, increasing reserve requirements. The window for using these deposits to reduce priority sector lending targets is also closed for new deposits. Banks should reassess their funding and liquidity strategies, as the earlier incentive to attract long-term foreign currency deposits is no longer available.
What you must do
Identify all incremental FCNR(B) and NRE deposits (3-year+ 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 include new FCNR(B)/NRE deposits raised after March 7, 2014, in CRR/SLR maintenance from the fortnight beginning March 8, 2014.
Continue to exclude advances against the exempted deposits from priority sector lending outstanding advances until repayment, as per the circular.
Communicate the change to treasury and compliance teams to avoid any reserve maintenance shortfalls.
Who it affects
Regional Rural Banks (RRBs)
❓ Common questions
Which deposits are affected by this withdrawal?
Only incremental FCNR(B) and NRE deposits with maturity of three years or more, raised after July 26, 2013, are affected. Deposits outstanding as on March 7, 2014, retain exemption till maturity; new deposits after that date do not qualify.
Does the exclusion from priority sector lending targets continue?
Yes, advances extended against the deposits that qualified for CRR/SLR exemption will still be excluded from outstanding advances for priority sector lending targets for RRBs until those advances are repaid.
When does the withdrawal take effect?
The withdrawal is effective from the reporting fortnight beginning March 8, 2014. Banks must comply from that date onward.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/486
RPCD.CO.RRB/RCB.BC.No.83/03.05.33/2013-14
February 11, 2014
All Regional Rural Banks/
State and Central Cooperative Banks
Dear Sir/Madam,
Section 42(1) of the Reserve Bank of India Act, 1934, Section 24 of Banking Regulation Act 1949 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 Outstanding Advances for Priority Sector Lending for RRBs
Please refer to our circular RPCD.CO.RRB/RCB.BC.No.20/03.05.33/2013-14 dated August 19, 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 against such incremental FCNR(B)/NRE deposits qualifying for exemption from CRR/SLR requirements will also be excluded from Outstanding Advances for computation of priority sector lending targets for Regional Rural Banks.
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 against the above mentioned incremental FCNR(B)/NRE deposits, qualifying for exemption from CRR/SLR requirements, will be eligible for exclusion from Outstanding Advances, till their repayment, for computation of priority sector lending targets for Regional Rural Banks.
4. Please acknowledge receipt to our Regional Office concerned.
Yours faithfully,
(A.Udgata)
Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/486 · issued 11 Feb 2014. The plain-English explanation above is BankPulse’s own independent summary.
Update internal systems to include new FCNR(B)/NRE deposits raised after March 7, 2014, in CRR/SLR maintenance from the fortnight beginning March 8, 2014.
📜 Compliance
Identify all incremental FCNR(B) and NRE deposits (3-year+ 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 the exempted deposits from priority sector lending outstanding advances until repayment, as per the circular.
Communicate the change to treasury and compliance teams to avoid any reserve maintenance 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 (Regional Rural Banks (RRBs)), your first concrete step on “RRBs: CRR/SLR exemption on FCNR(B)/NRE deposits withdrawn from March 8, 2014” is: “Identify all incremental FCNR(B) and NRE deposits (3-year+ 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 11 Feb 2014).
Circular: RBI/2013-14/486 -- RRBs: CRR/SLR exemption on FCNR(B)/NRE deposits withdrawn from March 8, 2014
Issued: 11 Feb 2014
Action required: Identify all incremental FCNR(B) and NRE deposits (3-year+ 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 include new FCNR(B)/NRE deposits raised after March 7, 2014, in CRR/SLR maintenance from the fortnight beginning March 8, 2014.
Action required: Continue to exclude advances against the exempted deposits from priority sector lending outstanding advances until repayment, as per the circular.
Action required: Communicate the change to treasury and compliance teams to avoid any reserve maintenance 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=8738&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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