What changed
RBI released the Reserve Bank of India (Small Finance Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Third Amendment Directions, 2026 on June 19, 2026. The amendment inserts a new sub-paragraph 20(7) exempting fresh NRE term deposits of tenor 3+ years (including renewals) mobilized between June 19, 2026 and September 30, 2026 from CRR and SLR. CRR exemption applies from the reporting fortnight beginning July 16, 2026. Transfers from NRO to NRE accounts do not qualify. Corresponding changes are made to paragraph 29(5) and Annex A Form A.
What it means for you
Small Finance Banks can now offer NRE term deposits of 3+ years without maintaining CRR or SLR on those deposits, provided they are mobilized between June 19, 2026 and September 30, 2026. This may reduce compliance costs and encourage longer-term NRE deposits. Banks must ensure that only eligible deposits (fresh or renewed, not transferred from NRO) are exempted and update their reporting systems accordingly.
What you must do
- Review the full text of the Third Amendment Directions, 2026 on the RBI website.
- Update internal CRR and SLR compliance checklists for Small Finance Banks to include the new exemption for NRE term deposits of 3+ years.
- Train treasury and compliance teams on the eligibility criteria: deposits mobilized between June 19, 2026 and September 30, 2026, and CRR exemption effective from July 16, 2026.
- Ensure that transfers from NRO to NRE accounts are not treated as eligible for the exemption.
- Monitor RBI’s portal for any clarifications or corrigenda to this amendment.
Who it affects
Small Finance Banks, Treasury departments of SFBs, Compliance officers at SFBs
What is the effective date of this Third Amendment?
The amendment comes into force with immediate effect from June 19, 2026. The CRR exemption applies from the reporting fortnight beginning July 16, 2026.
Does this amendment change the CRR or SLR rates for Small Finance Banks?
No, the amendment does not change the rates but introduces an exemption: NRE term deposits of 3+ years mobilized between June 19, 2026 and September 30, 2026 are exempt from CRR and SLR maintenance.