Current · Source: Reserve Bank of India · RBI/2026-27/104 · issued 08 Jun 2026 · ~2 min read
Quick answerRBI exempts fresh FCNR(B) deposits (3-5 year tenor) mobilised by Urban Co-operative Banks from June 8 to Sept 30, 2026, from CRR and SLR maintenance. This aims to boost dollar inflows via a USD-INR swap facility.
The rule, in the simplest words
Urban Co-operative Banks (UCBs) do not have to keep any money with RBI (CRR) or invest in safe bonds (SLR) for new FCNR(B) deposits (foreign currency deposits from Non-Resident Indians) that are for 3 to 5 years.
This special rule works only for deposits collected between June 8, 2026 and September 30, 2026.
The exemption starts from the reporting period beginning July 1, 2026 and lasts as long as the deposit stays in the bank.
Even if a customer renews their old FCNR(B) deposit during this time, it also gets the exemption.
How it plays out — a real example
A forex & trade-finance officer in Indore, Priya, sees that her UCB can now offer better rates on 3-year FCNR(B) deposits because the bank doesn't need to set aside cash for CRR/SLR. She calls a local NRI customer, Mr. Sharma, and explains that if he opens a $10,000 FCNR(B) deposit for 3 years before September 30, 2026, the bank can give him a higher interest rate, and the bank saves money too.
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
❓ Common questions
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.
📜 Read the original circular — full text as issued by RBI
RBI/2026-27/104
DOR.RET.REC.86/12.01.001/2026-27
June 08, 2026
Reserve Bank of India (Urban Co-operative Banks – Cash Reserve Ratio and
Statutory Liquidity Ratio) Second Amendment Directions, 2026
Please refer to the Governor's Statement dated June 5, 2026 , wherein it has been decided to introduce a US Dollar-Rupee swap facility for fresh Foreign Currency Non-Resident (Bank) [FCNR (B)] dollar funds, mobilised for a minimum tenor of three years and maximum tenor of five years.
2. In this connection, please refer to the Reserve Bank of India (Urban Co-operative Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025 (Updated as on January 22, 2026). It has been decided that fresh FCNR (B) deposits of minimum tenor of three years and maximum tenor of five years mobilized (including deposits that are renewed upon maturity) by the banks from the date of this Amendment Directions till September 30, 2026 will be exempted from maintenance of CRR and SLR.
3. Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 and pursuant to Section 42 of the Reserve Bank of India Act, 1934 and Sections 18 and 24, read with section 56 (AACS), of Banking Regulation Act, 1949, as amended from time to time, and all other provisions / laws enabling the Reserve Bank of India in this regard, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Amendment Directions hereinafter specified.
4. These Directions shall be called the Reserve Bank of India (Urban Co-operative Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Second Amendment Directions, 2026.
5. The provisions shall come into force with immediate effect.
6. These Amendment Directions modify the Reserve Bank of India (Urban Co-operative Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025 as under:
In paragraph 21, the sub-paragraph "5. Fresh FCNR (B) deposits of minimum tenor of three years and maximum tenor of five years mobilized (including deposits that are renewed upon maturity) by the banks between June 8, 2026 and September 30, 2026 are exempt from maintenance of CRR from the reporting fortnight beginning July 1, 2026 (i.e., based on the NDTL computation as on June 15, 2026) and subsequent fortnights thereafter. The exemption on reserves maintenance is available for the original deposit amounts till such time the deposits are held in the bank books" shall be inserted.
In paragraph 29(4), the words 'paragraphs 21(3) and (4)' shall be substituted with 'paragraphs 21(3), (4) and (5)'.
Yours faithfully,
(Manoranjan Padhy)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2026-27/104 · issued 08 Jun 2026. The plain-English explanation above is BankPulse’s own independent summary.
Train treasury and operations teams on the exemption window (June 8 to Sept 30, 2026) and tenor requirements (3-5 years).
💻 IT / Systems
Update internal CRR/SLR computation systems to exclude eligible FCNR(B) deposits from NDTL from July 1, 2026.
📜 Compliance
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.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are an IT/Systems lead at a bank this circular applies to (Urban Co-operative Banks, Treasury departments of UCBs, Compliance teams handling CRR/SLR reporting, Customers holding or considering FCNR(B) deposits), your first concrete step on “FCNR(B) CRR/SLR Exemption for UCBs Extended” is: “Update internal CRR/SLR computation systems to exclude eligible FCNR(B) deposits from NDTL from July 1, 2026.” (RBI issued this 08 Jun 2026).
Circular: RBI/2026-27/104 -- FCNR(B) CRR/SLR Exemption for UCBs Extended
Issued: 08 Jun 2026
Action required: Update internal CRR/SLR computation systems to exclude eligible FCNR(B) deposits from NDTL from July 1, 2026.
Action required: Train treasury and operations teams on the exemption window (June 8 to Sept 30, 2026) and tenor requirements (3-5 years).
Action required: Review FCNR(B) deposit mobilisation strategies to maximise the benefit before the September 30 deadline.
Action required: Ensure renewed deposits also qualify for exemption as per the circular.
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 02 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=13473&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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