What changed
RBI issued the Third Amendment Directions, 2026, inserting a new sub-paragraph in the existing CRR/SLR Directions. It exempts fresh NRE term deposits of 3 years or more (including renewals) mobilized between June 19 and Sept 30, 2026, from CRR and SLR requirements. The exemption starts from the reporting fortnight beginning July 16, 2026, and applies only to original deposit amounts; NRO-to-NRE transfers are excluded.
What it means for you
Banks can now attract longer-tenor NRE deposits without the cost of maintaining CRR and SLR reserves, improving their net interest margins. This is a targeted liquidity incentive to boost stable, long-term foreign currency inflows. Banks should update their NRE deposit product offerings and reporting systems to capture the exemption correctly.
What you must do
- Update NRE term deposit product terms to highlight the 3+ year tenor exemption for deposits booked between June 19 and Sept 30, 2026.
- Ensure CRR/SLR computation systems exclude eligible NRE deposits from NDTL from the fortnight beginning July 16, 2026.
- Train treasury and operations teams to identify and segregate qualifying deposits, including renewals, and exclude NRO-to-NRE transfers.
- Review Form A reporting to include the new item VIII.8 for NRE Term deposits – 2026 as per amended Annex A.
Who it affects
All commercial banks accepting NRE deposits, Treasury and ALM desks managing reserve requirements, Retail and NRI deposit product teams
Which deposits qualify for the CRR/SLR exemption?
Only fresh NRE term deposits with a tenor of 3 years or more, mobilized (including renewals) between June 19, 2026, and September 30, 2026, qualify. Transfers from NRO accounts to NRE accounts do not qualify.
When does the exemption become effective?
The exemption applies from the reporting fortnight beginning July 16, 2026, which is based on NDTL computation as on June 30, 2026, and continues for subsequent fortnights as long as the deposit remains in the bank's books.
Does the exemption apply to the entire deposit amount or only incremental?
The exemption is available for the original deposit amounts only. It is not limited to incremental deposits; all fresh qualifying deposits during the window are exempt.