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RBI Withdraws CRR/SLR Exemption on Incremental FCNR(B)/NRE Deposits for Urban Co-op Banks

Current · Source: Reserve Bank of India · RBI/2013-14/639 · issued 11 Jun 2014 · ~2 min read

Quick answerRBI has withdrawn the CRR/SLR exemption on incremental FCNR(B) and NRE deposits (3+ years maturity) for urban co-operative banks effective June 14, 2014. Only deposits outstanding as of June 13, 2014, retain exemption until maturity. Advances against these deposits still qualify for priority sector lending exclusion.

The rule, in the simplest words

Starting June 14, 2014, urban co-op banks must keep CRR (cash with RBI) and SLR (invest in safe bonds) for any new FCNR(B) or NRE deposits (money from abroad) that are for 3 years or more.
Only deposits that were already in the bank on June 13, 2014, still get the special rule of not needing CRR/SLR until they are taken out or mature.
Loans given using those old deposits (from before June 14) still don't count toward the bank's priority sector lending target until the loan is paid back.

How it plays out — a real example

Ravi, an agri & priority-sector lending officer in Indore, checks his bank's records on June 14, 2014. He sees that a new NRE deposit of ₹10 lakh for 3 years came in that morning. He tells his team they must now set aside CRR and SLR for this deposit, unlike the old ones from last month that still enjoy the exemption.

What changed

Previously, incremental FCNR(B) and NRE deposits with maturity of three years or more (from base date July 26, 2013) were exempt from CRR/SLR maintenance. Effective the reporting fortnight beginning June 14, 2014, this exemption is withdrawn for new deposits. Only the eligible amount outstanding as on June 13, 2014, continues to enjoy CRR/SLR exemption until maturity or premature withdrawal.

What it means for you

Urban co-operative banks can no longer park new incremental FCNR(B) or NRE deposits (3+ years) without maintaining CRR/SLR, increasing their reserve costs. However, advances made against these deposits that were already exempt will still be excluded from Adjusted Bank Credit for priority sector lending targets until repayment. Banks must adjust their liquidity management and lending strategies accordingly.

What you must do

Stop treating new incremental FCNR(B)/NRE deposits (3+ years maturity) as CRR/SLR-exempt from June 14, 2014.
Maintain CRR/SLR on all such deposits received after June 13, 2014, as per standard requirements.
Continue to exclude advances against eligible outstanding deposits (as of June 13, 2014) from Adjusted Bank Credit for priority sector lending computation until repayment.
Update internal systems and reporting processes to reflect the withdrawal of exemption for new deposits.

Who it affects

All Primary (Urban) Co-operative Banks, Treasury and ALM teams at urban co-op banks, Priority sector lending compliance departments

❓ Common questions

Regulatory timeline

Stated effective date effective June 14, 2014
Decoded by BankPulse 2026-06-18 09:22 IST

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

Does this circular affect deposits already exempted before June 14, 2014?

No. Incremental FCNR(B) and NRE deposits (3+ years maturity) outstanding as on June 13, 2014, continue to enjoy CRR/SLR exemption until their maturity or premature withdrawal.

Are advances against these deposits still excluded from Adjusted Bank Credit for priority sector lending?

Yes, advances extended in India against the eligible incremental deposits that qualify for CRR/SLR exemption will remain excluded from Adjusted Bank Credit until repayment.

What is the base date for calculating incremental deposits?

The base date remains July 26, 2013, as per the earlier circular. Only deposits above that base are considered incremental.

📜 Read the original circular — full text as issued by RBI

RBI/2013-14/639

 UBD.BPD.(PCB).Cir.No.72/13.01.000//2013-14

 June 11, 2014

 The Chief Executive Officer

 All Primary (Urban) Co-operative Banks

 Dear Sir/Madam,

 Section 42(1) of the Reserve Bank of India Act, 1934 and 

Section 18 & 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 

 Please refer to our circular UBD.BPD.(PCB).Cir.No.5/13.01.000//2013-14 dated August 27, 2013 , in terms of which Urban Co-operative Banks  were 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 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 Bank Credit for computation of priority sector lending targets.

 2. On a review, 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 June 14, 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 June 13, 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 Bank Credit, till their repayment, 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/2013-14/639 · issued 11 Jun 2014. The plain-English explanation above is BankPulse’s own independent summary.

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Who does what — compliance checklist

💻 IT / Systems

Update internal systems and reporting processes to reflect the withdrawal of exemption for new deposits.

📜 Compliance

Stop treating new incremental FCNR(B)/NRE deposits (3+ years maturity) as CRR/SLR-exempt from June 14, 2014.
Maintain CRR/SLR on all such deposits received after June 13, 2014, as per standard requirements.
Continue to exclude advances against eligible outstanding deposits (as of June 13, 2014) from Adjusted Bank Credit for priority sector lending computation until repayment.

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 Primary (Urban) Co-operative Banks, Treasury and ALM teams at urban co-op banks, Priority sector lending compliance departments), your first concrete step on “RBI Withdraws CRR/SLR Exemption on Incremental FCNR(B)/NRE Deposits for Urban Co-op Banks” is: “Stop treating new incremental FCNR(B)/NRE deposits (3+ years maturity) as CRR/SLR-exempt from June 14, 2014.” (RBI issued this 11 Jun 2014).

Circular: RBI/2013-14/639 -- RBI Withdraws CRR/SLR Exemption on Incremental FCNR(B)/NRE Deposits for Urban Co-op Banks
Issued: 11 Jun 2014
Action required: Stop treating new incremental FCNR(B)/NRE deposits (3+ years maturity) as CRR/SLR-exempt from June 14, 2014.
Action required: Maintain CRR/SLR on all such deposits received after June 13, 2014, as per standard requirements.
Action required: Continue to exclude advances against eligible outstanding deposits (as of June 13, 2014) from Adjusted Bank Credit for priority sector lending computation until repayment.
Action required: Update internal systems and reporting processes to reflect the withdrawal of exemption for new deposits.
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.

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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=8938&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.