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RBI exempts new 3‑5 yr FCNR(B) deposits from CRR/SLR for rural co‑ops

Current · Source: Reserve Bank of India · RBI/2026-27/105 · issued 08 Jun 2026 · ~2 min read

Quick answerEffective June 8 2026, fresh FCNR(B) deposits of minimum three years and maximum five years mobilized (including renewals) by rural co‑operative banks from June 8 to September 30 2026 will be exempt from CRR and SLR. The CRR exemption starts from the reporting fortnight beginning July 1 2026, based on NDTL as of June 15 2026. The exemption covers the original deposit amount while it remains on the bank’s books.

The rule, in the simplest words

Rural co-op banks can take foreign currency deposits (FCNR(B)) that last between 3 and 5 years, and they don't have to keep any reserve money (CRR/SLR) for them.
This special rule works only for deposits made from June 8, 2026 to September 30, 2026, including renewals of old deposits.
The reserve money exemption starts from the two-week period beginning July 1, 2026, using the bank's total deposits (NDTL) as of June 15, 2026.
The exemption covers only the original deposit amount, and only while that money stays in the bank.

How it plays out — a real example

A forex & trade-finance officer in Indore, Priya, gets a call from a customer wanting to renew a 4-year FCNR(B) deposit on July 15, 2026. She checks the new rule and smiles—she can accept the renewal without worrying about setting aside reserve money (CRR/SLR) for it, freeing up funds to lend to more farmers in her village.

What changed

The RBI has added a new sub‑paragraph to the 2025 directions, stating that FCNR(B) deposits with tenors of three to five years, mobilised from June 8 to September 30 2026, are exempt from CRR and SLR. The CRR exemption starts with the reporting fortnight beginning July 1 2026, based on NDTL as of June 15 2026. The amendment also updates cross‑references in paragraph 29(4). The exact operative text: the new sub-paragraph 21(5) explicitly exempts these deposits from CRR from the July 1, 2026 fortnight (NDTL as on June 15, 2026); the amendment also extends the cross-reference in paragraph 29(4) to include 21(5) -- paragraph 2’s summary states the exemption covers both CRR and SLR, so SLR treatment follows through that 29(4) cross-reference into the base 2025 Directions’ SLR provisions, rather than being restated word-for-word in 21(5) itself.

What it means for you

Rural co‑operative banks can now attract longer‑term foreign currency deposits without tying up funds for reserve requirements, improving liquidity and profitability. The exemption applies only to the original deposit amount and only while the funds stay on the books. Banks should adjust their NDTL calculations accordingly.

What you must do

Identify all FCNR(B) deposits received between June 8 and September 30 2026 with tenors of three to five years.
Exclude the original amounts of these deposits from CRR and SLR calculations from the July 1 2026 reporting fortnight onward.
Update internal reporting systems to reflect the new exemption and ensure compliance with the revised paragraph references.
Monitor the maturity and renewal of these deposits to maintain correct reserve treatment.

Who it affects

Rural co‑operative banks, Their FCNR(B) deposit customers, Regulatory reporting teams

❓ Common questions

Regulatory timeline

Stated effective date Effective June 8 2026
Decoded by BankPulse 2026-06-17 13:00 IST

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Does the exemption apply to renewed FCNR(B) deposits?

Yes, deposits that are renewed upon maturity also qualify for the CRR/SLR exemption, as per the source.

What happens if a bank withdraws part of the exempted deposit before maturity?

The source text says the exemption applies only “for the original deposit amounts till such time the deposits are held in the bank books” -- it does not spell out a specific resumption mechanic for a partial withdrawal. BankPulse’s reasonable reading is that a withdrawn portion would no longer count as held/exempt, but this circular does not itself state an operative CRR/SLR resumption procedure; check the base 2025 Directions or your RBI regional office for exactly how reserves treatment is recalculated in that scenario.

Do other types of foreign currency deposits receive the same exemption?

No, the exemption is limited to fresh FCNR(B) deposits with tenors of three to five years taken during the specified period.

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

RBI/2026-27/105
DOR.RET.REC.87/12.01.001/2026-27
 June 8, 2026
 Reserve Bank of India (Rural 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 (Rural 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 (Rural 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 (Rural 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 21 (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/2026-27/105 · issued 08 Jun 2026. The plain-English explanation above is BankPulse’s own independent summary.

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Who does what — compliance checklist

💻 IT / Systems

Update internal reporting systems to reflect the new exemption and ensure compliance with the revised paragraph references.

📜 Compliance

Identify all FCNR(B) deposits received between June 8 and September 30 2026 with tenors of three to five years.
Exclude the original amounts of these deposits from CRR and SLR calculations from the July 1 2026 reporting fortnight onward.
Monitor the maturity and renewal of these deposits to maintain correct reserve treatment.

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 (Rural co‑operative banks, Their FCNR(B) deposit customers, Regulatory reporting teams), your first concrete step on “RBI exempts new 3‑5 yr FCNR(B) deposits from CRR/SLR for rural co‑ops” is: “Identify all FCNR(B) deposits received between June 8 and September 30 2026 with tenors of three to five years.” (RBI issued this 08 Jun 2026).

Circular: RBI/2026-27/105 -- RBI exempts new 3‑5 yr FCNR(B) deposits from CRR/SLR for rural co‑ops
Issued: 08 Jun 2026
Action required: Identify all FCNR(B) deposits received between June 8 and September 30 2026 with tenors of three to five years.
Action required: Exclude the original amounts of these deposits from CRR and SLR calculations from the July 1 2026 reporting fortnight onward.
Action required: Update internal reporting systems to reflect the new exemption and ensure compliance with the revised paragraph references.
Action required: Monitor the maturity and renewal of these deposits to maintain correct reserve treatment.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________

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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=13474&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.