The Reserve Bank of India has issued the Reserve Bank of India (Regional Rural Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Second Amendment Directions, 2026, effective from 8 June 2026. The amendment follows the RBI Governor's announcement of a USD-INR swap facility aimed at attracting foreign currency deposits and enhancing foreign exchange inflows.
Under the amendment, fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits with a minimum tenor of three years and a maximum tenor of five years, mobilized by Regional Rural Banks between 8 June 2026 and 30 September 2026 (including renewals upon maturity), will be exempt from the maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR). The exemption will apply from the reporting fortnight beginning 1 July 2026 and will continue for the original deposit amount as long as the deposits remain on the banks' books.
The amendment requires eligible banks to appropriately identify and report such FCNR(B) deposits under the newly introduced reporting category in the prescribed regulatory returns. The measure is expected to reduce the regulatory cost of mobilizing FCNR(B) deposits and encourage additional foreign currency inflows during the specified period. For affected Regional Rural Banks, necessary updates to treasury, regulatory reporting, and reserve maintenance processes should be undertaken to ensure compliance with the revised framework.
[Notification No. RBI/2026-27/106]
