What changed
RBI has amended the Urban Co-operative Banks (CRR and SLR) Directions, 2025 to insert a new sub-paragraph in paragraph 21. Fresh NRE term deposits with a tenor of three years or more, mobilized between June 19, 2026 and September 30, 2026, are now exempt from CRR and SLR maintenance. The CRR exemption starts from the reporting fortnight beginning July 16, 2026, based on NDTL as on June 30, 2026.
What it means for you
UCBs can now attract longer-tenor NRE deposits without the cost of maintaining reserves, improving their net interest margins and liquidity. This is a targeted incentive to boost stable, long-term foreign currency inflows. Banks should note that transfers from NRO to NRE accounts do not qualify for this exemption.
What you must do
- Update your deposit product offerings to highlight the CRR/SLR exemption on 3-year+ NRE term deposits.
- Ensure your treasury and compliance teams adjust NDTL calculations from July 16, 2026 fortnight onwards.
- Train branch staff to correctly identify eligible deposits and exclude NRO-to-NRE transfers from the exemption.
- Monitor the September 30, 2026 deadline to avoid inadvertent reserve maintenance post-expiry.
Who it affects
Urban Co-operative Banks (UCBs), NRE deposit holders (NRIs), Treasury and compliance departments of UCBs
Does the exemption apply to renewals of existing NRE deposits?
Yes, renewals upon maturity of NRE term deposits of three years or more are also exempt, provided they occur between June 19, 2026 and September 30, 2026.
Are NRO to NRE account transfers eligible for this exemption?
No, the RBI has explicitly stated that transfers from Non-Resident (Ordinary) accounts to NRE accounts will not qualify for the CRR/SLR exemption.
When does the CRR exemption become effective for reporting?
The exemption applies from the reporting fortnight beginning July 16, 2026, based on the NDTL computation as on June 30, 2026.