The Reserve Bank of India (RBI) on June 17, 2026, issued the Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Amendment Directions, 2026, further to amend the Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Directions, 2025.
The following has been stated:
• Under the amendment, the existing restriction that interest rates on NRE deposits cannot exceed rates offered on comparable domestic rupee term deposits has been temporarily withdrawn for fresh NRE deposits and renewals with tenors of three years and above from June 17, 2026, to September 30, 2026. However, transfers from NRO accounts to NRE accounts will not qualify for this exemption.
• The amendment also temporarily removes the interest rate ceiling on fresh FCNR (B) deposits and renewals with maturities of three years and above up to five years during the same period. This allows Small Finance Banks to offer interest rates above the prescribed ceiling for eligible FCNR (B) deposits, enabling them to attract additional non-resident deposits and foreign currency inflows.
[Notification no. - RBI/2026-27/139 DOR.SOG(SPE).REC.119/13.03.00/2026-27]
