What changed
RBI has amended the 2025 CRR/SLR Directions for Urban Co-operative Banks to exempt fresh FCNR(B) deposits of 3-5 year tenor mobilised between June 8 and September 30, 2026, from CRR and SLR requirements. The exemption applies from the reporting fortnight beginning July 1, 2026, and continues as long as the deposits remain on the bank's books. This aligns with the Governor's June 5, 2026 announcement of a USD-INR swap facility for such deposits.
What it means for you
Urban Co-operative Banks can now attract longer-tenor FCNR(B) deposits without the cost of maintaining CRR and SLR, improving their net interest margins. This should encourage UCBs to mobilise foreign currency deposits, supporting dollar liquidity in the system. Banks need to ensure proper documentation and reporting to claim the exemption.
What you must do
- Update internal CRR/SLR computation systems to exclude eligible FCNR(B) deposits from NDTL from July 1, 2026.
- Train treasury and operations teams on the exemption window (June 8 to Sept 30, 2026) and tenor requirements (3-5 years).
- Review FCNR(B) deposit mobilisation strategies to maximise the benefit before the September 30 deadline.
- Ensure renewed deposits also qualify for exemption as per the circular.
Who it affects
Urban Co-operative Banks, Treasury departments of UCBs, Compliance teams handling CRR/SLR reporting, Customers holding or considering FCNR(B) deposits
Which deposits are exempt from CRR and SLR under this amendment?
Fresh FCNR(B) deposits with a minimum tenor of three years and maximum of five years, mobilised (including renewals) between June 8, 2026 and September 30, 2026, are exempt.
When does the CRR/SLR exemption become effective?
The exemption applies from the reporting fortnight beginning July 1, 2026, based on NDTL computation as on June 15, 2026, and continues for subsequent fortnights as long as the deposits remain in the bank's books.
Does the exemption apply to renewed FCNR(B) deposits?
Yes, deposits that are renewed upon maturity during the specified period also qualify for the exemption, provided they meet the tenor conditions.