The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Commercial Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Second Amendment Directions, 2026, introducing regulatory relief for banks mobilizing fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits. The amendment follows the announcement made in the Governor’s Statement on June 5, 2026, regarding the introduction of a US Dollar–Rupee swap facility aimed at attracting stable foreign currency inflows into the Indian banking system.
Under the amended directions, fresh FCNR(B) deposits with a minimum maturity of three years and a maximum maturity of five years, mobilized by banks between June 8, 2026, and September 30, 2026, will be exempt from the maintenance of both the Cash Reserve Ratio (CRR) and the Statutory Liquidity Ratio (SLR). The exemption also applies to deposits renewed upon maturity during the specified period.
The measure is intended to incentivize banks to mobilize foreign currency deposits from non-resident Indians (NRIs) and strengthen the country’s foreign exchange reserves. By exempting these deposits from CRR and SLR requirements, banks can deploy a larger portion of the funds for productive purposes, thereby reducing the cost of mobilizing such deposits and improving the attractiveness of the FCNR(B) scheme.
The CRR exemption will be available from the reporting fortnight beginning July 1, 2026, based on the Net Demand and Time Liabilities (NDTL) computation as of June 15, 2026, and will continue for subsequent fortnights. The regulatory relief will remain applicable to the original deposit amounts for as long as the deposits are maintained on the banks’ books.
To operationalize the change, the RBI has amended relevant provisions of the Reserve Bank of India (Commercial Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025. These amendments include the insertion of a new sub-paragraph under paragraph 20 providing the CRR exemption, corresponding modifications to paragraph 29(5), and updates to reporting formats contained in Annex A to Form A.
The amendment reflects the RBI’s proactive approach to managing liquidity and supporting external sector stability. By combining the FCNR(B) deposit incentive with the newly introduced USD-INR swap facility, the central bank aims to encourage long-term foreign currency inflows, enhance banking sector liquidity, and strengthen the resilience of India’s external financial position amid evolving global economic conditions.
