What changed
The RBI has amended the Rural Co-operative Banks (CRR and SLR) Directions, 2025 to insert a new sub-paragraph (6) under paragraph 21. This exempts fresh NRE term deposits of three years or more, mobilized from June 19, 2026 to September 30, 2026, from CRR and SLR maintenance. The exemption applies from the reporting fortnight beginning July 16, 2026 (based on NDTL computation as on June 30, 2026), and remains valid as long as the deposit stays in the bank's books. Transfers from NRO to NRE accounts do not qualify.
What it means for you
For rural co-operative banks, this is a targeted liquidity relief that reduces the cost of raising long-term NRE deposits. By freeing up funds that would otherwise be locked in reserves, banks can deploy more resources for lending or investment. The window is short—just over three months—so banks need to act quickly to attract these deposits. The exclusion of NRO-to-NRE transfers prevents arbitrage and ensures the incentive is for genuine new inflows.
What you must do
- Review your current NRE deposit product suite and ensure you can offer 3+ year tenors to capture this exemption.
- Train branch staff and treasury teams on the eligibility criteria: only fresh NRE deposits (including renewals) between June 19 and Sep 30, 2026 qualify; NRO-to-NRE transfers do not.
- Update your CRR/SLR computation systems to exclude these deposits from NDTL from the July 16, 2026 fortnight onward.
- Communicate the benefit to existing NRE depositors and potential customers to maximize inflows before the September 30 deadline.
Who it affects
Rural Co-operative Banks (RCBs), Treasury and ALM teams at RCBs, NRE depositors (especially those with long-term investment horizons)
Does this exemption apply to renewals of existing NRE deposits?
Yes, renewals upon maturity of existing NRE deposits also qualify, provided the renewed deposit has a tenor of three years or more and the renewal occurs between June 19, 2026 and September 30, 2026.
What happens if the deposit is withdrawn before maturity?
The exemption is available for the original deposit amount as long as it remains in the bank's books. If the deposit is prematurely withdrawn, the exemption would cease, and the bank would need to maintain CRR/SLR on that amount from the relevant fortnight.
Are NRE deposits from any source eligible, or only from specific countries?
The direction does not restrict the source country. Any fresh NRE term deposit meeting the tenor and mobilization period criteria qualifies, as long as it is not a transfer from an NRO account.