RBI exempts fresh FCNR(B) deposits from CRR, SLR norms till September 30 to boost foreign currency inflows
Mumbai, June 9
The Reserve Bank of India has exempted fresh Foreign Currency Non-Resident deposits mobilised by banks from Cash Reserve Ratio and Statutory Liquidity Ratio requirements, in a move aimed at facilitating foreign currency inflows under the announced US Dollar-Rupee swap facility.
In four separate notifications issued on Monday for commercial banks, small finance banks, rural co-operative banks and regional rural banks, the central bank said the exemption would apply to fresh FCNR(B) deposits with a minimum tenor of three years and a maximum tenor of five years raised up to September 30, 2026.
The RBI said the move follows the Governor's announcement on June 5. In all four notifications, the central bank noted that it had been decided "to introduce a US Dollar-Rupee swap facility for fresh Foreign Currency Non-Resident (Bank) [FCNR (B)] dollar funds, mobilised for a minimum tenor of three years and maximum tenor of five years."
Referring to the existing CRR and SLR directions, the RBI said, "It has been decided that fresh FCNR (B) deposits of minimum tenor of three years and maximum tenor of five years mobilized (including deposits that are renewed upon maturity) by the banks from the date of this Amendment Directions till September 30, 2026 will be exempted from maintenance of CRR and SLR."
The exemption covers commercial banks, small finance banks, rural co-operative banks and regional rural banks through corresponding amendments to their respective CRR and SLR directions for 2025. The provisions shall come into force with immediate effect.
According to the RBI, "The exemption on reserves maintenance is available for the original deposit amounts till such time the deposits are held in the bank books."
The measure is expected to make FCNR(B) deposits more attractive for banks by lowering regulatory costs and supporting the mobilisation of foreign currency resources through the special swap window announced.
— ANI
Reader Comments
Great decision by RBI! This will definitely encourage NRIs to park their money in India. The USD-Rupee swap facility also provides stability. However, I hope this doesn't lead to unnecessary rupee appreciation pressure. Balance needed. 💰
Good move but timing matters. NRE/NRO deposits already have CRR/SLR exemptions, so FCNR(B) exemption makes sense for parity. But why only till Sept 2026? RBI should consider making it permanent if it helps forex reserves. Also, small finance banks and rural banks being included is a plus.
Interesting. But I have a concern - are we becoming too dependent on NRI deposits for forex stability? What about export competitiveness and import substitution? Short-term measures are fine, but long-term we need structural reforms. Still, this is a pragmatic step for now. 👍
Finally! Banks were charging high interest rates on FCNR deposits due to CRR/SLR costs. This exemption will make rates more competitive. NRIs in Gulf countries will especially benefit. But I wish RBI also considered reducing TDS rates on NRI deposits to make it even more attractive.
Dekhte hain kitna asar hota hai. Last time such exemptions in 2013 brought in $26 billion. But now global interest rates are different. USD deposits are offering 5%+ abroad, so Indian banks need to offer competitive rates too. Hope this helps manage rupee volatility.
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