Fresh USD FCNR(B) deposits mobilised between June 8 and September 30, 2026 are exempt from CRR and SLR requirements. The benefit applies across commercial banks, SFBs, co-operative banks, and RRBs.
TL;DR — Executive Summary
⚡ Key Takeaways
RBI issued five notifications (RBI/2026-27/102 to 106) on June 8, 2026.
Fresh USD FCNR(B) deposits of 3–5 years qualify for CRR and SLR exemption.
Mobilisation window: June 8 to September 30, 2026.
Renewed FCNR(B) deposits at maturity are also eligible.
CRR exemption applies from the reporting fortnight beginning July 1, 2026.
Exemption continues for the original deposit amount while the deposit remains on bank books.
RBI's USD-INR swap facility complements the scheme.
Applicable to commercial banks, SFBs, UCBs, rural co-operative banks, and RRBs.
Objective is to attract NRI dollar inflows and strengthen forex reserves.
Banks may be able to offer more competitive FCNR(B) deposit rates.
RBI Grants CRR & SLR Exemption on Fresh FCNR(B) Deposits: Five June 2026 Notifications Explained
25 min read4,438 wordsMedium impact12 views
Summary
The RBI has issued five Amendment Directions dated June 8, 2026 granting CRR and SLR exemptions on fresh US Dollar FCNR(B) deposits of 3–5 year tenor mobilised between June 8 and September 30, 2026. The measure aims to attract NRI deposits, strengthen forex reserves, and support rupee stability.
<!-- HERO -->
<div class="rbi-hero">
<div class="overline">🏹 RBI · Banking Regulation · June 8, 2026</div>
<h2>RBI Introduces <span>CRR & SLR Exemption</span> on Fresh FCNR(B) Deposits<br>— Five Simultaneous Notifications Explained</h2>
<p>Following the Governor's Statement of June 5, 2026, the Reserve Bank of India issued five simultaneous Amendment Directions on June 8, 2026 granting CRR and SLR exemptions on fresh FCNR(B) dollar deposits to all categories of banks — Commercial Banks, Small Finance Banks, Urban Co-operative Banks, Rural Co-operative Banks, and Regional Rural Banks.</p>
</div>
<!-- SUMMARY GRID -->
<h2>At a Glance — Five Notifications, One Policy</h2>
<div class="sum-grid">
<div class="sum-item"><span class="lbl">Policy Announced</span><p>Governor's Statement — June 5, 2026</p></div>
<div class="sum-item gn"><span class="lbl">Notifications Issued</span><p>June 8, 2026 (5 Notifications: RBI/2026-27/102 to 106)</p></div>
<div class="sum-item gd"><span class="lbl">What Is Exempted</span><p>CRR & SLR maintenance on fresh FCNR(B) US dollar deposits (3–5 year tenor)</p></div>
<div class="sum-item tl"><span class="lbl">Mobilisation Window</span><p>June 8, 2026 to September 30, 2026 (including renewals at maturity)</p></div>
<div class="sum-item or"><span class="lbl">CRR Exemption From</span><p>Fortnight beginning July 1, 2026 (based on NDTL as of June 15, 2026)</p></div>
<div class="sum-item pu"><span class="lbl">Duration of Exemption</span><p>Till the deposits are held in the bank's books (original deposit amounts)</p></div>
<div class="sum-item rd"><span class="lbl">Legal Authority</span><p>Section 35A of Banking Regulation Act, 1949; Section 42 of RBI Act, 1934; Sections 18 & 24 of BR Act, 1949</p></div>
<div class="sum-item"><span class="lbl">Signed By</span><p>Manoranjan Padhy, Chief General Manager, RBI</p></div>
</div>
<!-- KEY NUMBERS -->
<h2>Key Numbers</h2>
<div class="nr">
<div class="nc"><span class="nb">5</span><div class="nl">Simultaneous notifications covering all bank categories</div></div>
<div class="nc g"><span class="nb">3–5 yrs</span><div class="nl">Minimum 3 / maximum 5 year tenor for qualifying FCNR(B) deposits</div></div>
<div class="nc t"><span class="nb">Sep 30</span><div class="nl">2026 — deadline to mobilise qualifying FCNR(B) deposits</div></div>
<div class="nc o"><span class="nb">Jul 1</span><div class="nl">2026 — CRR exemption kicks in from this reporting fortnight</div></div>
<div class="nc p"><span class="nb">Jun 15</span><div class="nl">2026 — NDTL computation date for the first CRR exemption fortnight</div></div>
<div class="nc"><span class="nb">102–106</span><div class="nl">RBI circular numbers (2026-27) covering these 5 notifications</div></div>
</div>
<!-- INTRO -->
<h2>What Happened on June 5–8, 2026? — Background and Context</h2>
<p>On <strong>June 5, 2026</strong>, RBI Governor Sanjay Malhotra delivered the <a href="/glossary/monetary-policy-committee" class="text-gold font-semibold hover:underline" title="Monetary Policy Committee definition">Monetary Policy Committee</a>'s policy statement. Among the several liquidity and monetary measures announced, one stood out for its potential to attract significant foreign currency inflows into India: the introduction of a <strong>US Dollar-Rupee swap facility</strong> for fresh Foreign Currency Non-Resident (Bank) — commonly known as <strong>FCNR(B)</strong> — dollar deposits mobilised for a minimum tenor of three years and maximum tenor of five years.</p>
<p>To operationalise this policy and make it commercially attractive for banks to mobilise long-tenor FCNR(B) deposits, the RBI followed up three days later on <strong>June 8, 2026</strong> with five simultaneous Amendment Directions — one each for the five different categories of banks regulated by RBI. The core incentive in each notification is identical: <strong>fresh FCNR(B) dollar deposits mobilised between June 8 and September 30, 2026 are exempt from the mandatory maintenance of <a href="/glossary/crr" class="text-gold font-semibold hover:underline" title="Cash Reserve Ratio definition">Cash Reserve Ratio</a> (CRR) and <a href="/glossary/slr" class="text-gold font-semibold hover:underline" title="Statutory Liquidity Ratio definition">Statutory Liquidity Ratio</a> (SLR)</strong> on such deposit amounts.</p>
<div class="hb gold">
<h4>💡 Why Does CRR/SLR Exemption Matter for FCNR(B) Deposits?</h4>
<p>Banks are ordinarily required to set aside a portion of their deposits as mandatory reserves — <strong>CRR</strong> (cash parked with RBI, currently 4%) and <strong>SLR</strong> (liquid assets like government securities, currently 18%). This means for every ₹100 of deposits, a bank can only deploy ₹78 for lending or investment — the rest sits as statutory reserves earning little or nothing. For foreign currency deposits like FCNR(B), these requirements reduce the cost-effective return for banks and make them less competitive in pricing these deposits to <a href="/glossary/nri" class="text-gold font-semibold hover:underline" title="NRI definition">NRI</a> depositors. By exempting FCNR(B) deposits from CRR and SLR, RBI is effectively allowing banks to deploy <strong>100% of these dollar deposits</strong>, dramatically improving the economics of mobilising them and enabling banks to offer better rates to NRI depositors.</p>
</div>
<!-- WHAT IS FCNR(B) -->
<h2>What is FCNR(B)? — Understanding the Foundation</h2>
<p>FCNR(B) — Foreign Currency Non-Resident (Bank) — is a term deposit account available in India to Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs). Key characteristics:</p>
<div class="tw">
<table class="tt">
<thead><tr><th>Feature</th><th>Details</th></tr></thead>
<tbody>
<tr><td>Account Type</td><td>Fixed deposit (term deposit) — only, not savings or current account</td></tr>
<tr><td>Currency</td><td>Foreign currency — US Dollar, Pound Sterling, Euro, Japanese Yen, Canadian Dollar, Australian Dollar</td></tr>
<tr><td>Who Can Open</td><td>Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs)</td></tr>
<tr><td>Tenor</td><td>Minimum 1 year, maximum 5 years</td></tr>
<tr><td>Interest Rate</td><td>Determined by individual banks within RBI ceiling rates</td></tr>
<tr><td>Repayment</td><td>Principal and interest repaid in foreign currency — no INR conversion risk for depositor at maturity</td></tr>
<tr><td>Exchange Risk</td><td>Borne entirely by the bank — the bank mobilises foreign currency and must manage the exchange risk when deploying funds in India</td></tr>
<tr><td>Tax</td><td>Interest income is tax-free in India for NRIs</td></tr>
<tr><td>Premature Withdrawal</td><td>Permitted after 1 year (subject to penalty); no interest for deposits withdrawn before 1 year</td></tr>
<tr><td><a href="/glossary/repatriation" class="text-gold font-semibold hover:underline" title="Repatriation definition">Repatriation</a></td><td>Fully repatriable — principal and interest can be freely sent abroad</td></tr>
</tbody>
</table>
</div>
<div class="hb blue">
<h4>📈 Why USD FCNR(B) Specifically — The USD-Rupee Swap</h4>
<p>The June 5 announcement specified a <strong>USD-Rupee swap facility</strong> for FCNR(B) deposits. This means RBI itself will offer a swap to banks: the bank mobilises US dollars from NRIs via FCNR(B), converts them to INR using RBI's swap facility (at a known, predictable exchange rate), deploys the INR in India, and at maturity converts back to USD using the forward leg of the swap to repay the depositor in foreign currency. This removes the exchange rate risk from the bank's books — making it even more attractive for banks to aggressively mobilise FCNR(B) deposits. Combined with the CRR/SLR exemption, the economics for banks become highly compelling.</p>
</div>
<!-- FIVE NOTIFICATIONS -->
<h2>The Five Notifications — Who, What, and How</h2>
<div class="notif-grid">
<div class="notif-card b1">
<div class="notif-no">RBI/2026-27/102</div>
<div class="notif-meta">
<span class="ntag b">DOR.RET.REC.84/12.01.001/2026-27</span>
<span class="ntag g">June 8, 2026</span>
</div>
<h4>Commercial Banks — CRR & SLR Second Amendment Directions, 2026</h4>
<p>Applicable to all scheduled commercial banks, payment banks, and local area banks (excluding RRBs and co-operative banks covered by separate notifications). Inserts new sub-paragraph 8 in Paragraph 20 of the CRR/SLR Directions, 2025 (Updated January 22, 2026). Also updates para reference in Paragraph 29(5) and updates Annex A to Form A (CRR reporting form) to add a separate reporting line "FCNR(B) – 2026 [Para 20(8)]".</p>
</div>
<div class="notif-card b2">
<div class="notif-no">RBI/2026-27/103</div>
<div class="notif-meta">
<span class="ntag b">DOR.RET.REC.85/12.01.001/2026-27</span>
<span class="ntag g">June 8, 2026</span>
</div>
<h4>Small Finance Banks — CRR & SLR Second Amendment Directions, 2026</h4>
<p>Applies to all SEBI-regulated Small Finance Banks. Inserts new sub-paragraph 6 in Paragraph 20 of the SFB CRR/SLR Directions, 2025. Also updates Paragraph 29(5) and adds a separate reporting line "FCNR(B) – 2026 [Para 20(6)]" in Annex A to Form A. Exact same exemption terms as commercial banks.</p>
</div>
<div class="notif-card b3">
<div class="notif-no">RBI/2026-27/104</div>
<div class="notif-meta">
<span class="ntag b">DOR.RET.REC.86/12.01.001/2026-27</span>
<span class="ntag g">June 8, 2026</span>
</div>
<h4>Urban Co-operative Banks — CRR & SLR Second Amendment Directions, 2026</h4>
<p>Applies to all Urban Co-operative Banks (UCBs) regulated by RBI. Inserts new sub-paragraph 5 in Paragraph 21 of the UCB CRR/SLR Directions, 2025. Updates Paragraph 29(4) to include the new reference. Legal authority additionally includes Section 56 (AACS) of the Banking Regulation Act, 1949, which is the section applicable to co-operative societies.</p>
</div>
<div class="notif-card b4">
<div class="notif-no">RBI/2026-27/105</div>
<div class="notif-meta">
<span class="ntag b">DOR.RET.REC.87/12.01.001/2026-27</span>
<span class="ntag g">June 8, 2026</span>
</div>
<h4>Rural Co-operative Banks — CRR & SLR Second Amendment Directions, 2026</h4>
<p>Applies to Rural Co-operative Banks (State Co-operative Banks, District Central Co-operative Banks). Inserts new sub-paragraph 5 in Paragraph 21 of the Rural Co-operative Banks CRR/SLR Directions, 2025. Updates Paragraph 29(4) accordingly. Also invokes Section 56 (AACS) of the Banking Regulation Act, 1949.</p>
</div>
<div class="notif-card b5">
<div class="notif-no">RBI/2026-27/106</div>
<div class="notif-meta">
<span class="ntag b">DOR.RET.REC.88/12.01.001/2026-27</span>
<span class="ntag g">June 8, 2026</span>
</div>
<h4>Regional Rural Banks — CRR & SLR Second Amendment Directions, 2026</h4>
<p>Applies to all 43 Regional Rural Banks (RRBs). Inserts new sub-paragraph 5 in Paragraph 20 of the RRB CRR/SLR Directions, 2025. Updates Paragraph 28(5) to include the new reference. Adds separate reporting line in Annex A to Form A for FCNR(B) 2026 deposits.</p>
</div>
</div>
<!-- EXACT TERMS -->
<h2>Exact Terms of the Exemption — Every Condition Explained</h2>
<p>The text of the new paragraph inserted in each notification's parent directions is identical in substance across all five bank categories:</p>
<div class="hb teal">
<h4>📄 Verbatim Substance of the New Paragraph (Inserted in Each Bank Category's Directions)</h4>
<p style="font-style:italic;background:#fff;padding:14px 16px;border-radius:6px;border:1px solid var(--br);margin-top:10px;">"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 between <strong>June 8, 2026 and September 30, 2026</strong> are exempt from maintenance of CRR from the reporting fortnight beginning <strong>July 1, 2026</strong> (i.e., based on the NDTL computation as on June 15, 2026) and subsequent fortnights thereafter. The exemption on reserves maintenance is available for the <strong>original deposit amounts</strong> till such time the deposits are held in the bank books."</p>
</div>
<h3>Condition-by-Condition Analysis</h3>
<div class="tw">
<table class="tt">
<thead><tr><th>Condition</th><th>Exact Requirement</th><th>What This Means Practically</th></tr></thead>
<tbody>
<tr><td>Currency</td><td>US Dollar (USD) only</td><td>Only FCNR(B) deposits denominated in US Dollars qualify. Other currencies (GBP, EUR, JPY, CAD, AUD) do not qualify under this specific scheme</td></tr>
<tr><td>Deposit Type</td><td>Fresh FCNR(B) deposits only</td><td>"Fresh" means new deposits mobilised during the window. Pre-existing FCNR(B) deposits do not qualify, except for renewals (see next condition)</td></tr>
<tr><td>Renewals at Maturity</td><td>Deposits renewed upon maturity are included</td><td>If an existing FCNR(B) deposit matures during June 8–September 30, 2026, and the NRI renews it for a 3–5 year term, the renewed deposit qualifies</td></tr>
<tr><td>Minimum Tenor</td><td>3 years (36 months)</td><td>Only deposits with original tenor of at least 3 years qualify — short-term or medium-term FCNR(B) deposits don't get the CRR/SLR benefit</td></tr>
<tr><td>Maximum Tenor</td><td>5 years (60 months)</td><td>Upper bound of 5 years — consistent with the maximum FCNR(B) deposit tenor already permitted under FEMA Regulations</td></tr>
<tr><td>Mobilisation Window</td><td>June 8, 2026 to September 30, 2026</td><td>Only deposits booked within this approximately 4-month window qualify; mobilisation after September 30 does not get the exemption</td></tr>
<tr><td>CRR Exemption Start</td><td>Reporting fortnight beginning July 1, 2026</td><td>Even though deposits can be mobilised from June 8, CRR exemption starts from the July 1 fortnight. The intervening deposits (June 8–June 14) will likely require CRR for the June 15 computation period</td></tr>
<tr><td>NDTL Computation Date</td><td>Based on NDTL as on June 15, 2026</td><td>Net Demand and Time Liabilities as computed for the June 15 reporting date will be the basis for the July 1 fortnight CRR calculation, including these FCNR(B) deposits in NDTL</td></tr>
<tr><td>Exemption Amount</td><td>Original deposit amounts only</td><td>Interest accrual does not get the CRR benefit — only the original principal deposit amount is exempt from reserves maintenance</td></tr>
<tr><td>Duration</td><td>Till deposits are held in bank books</td><td>The exemption is available for the full life of the qualifying deposit — it doesn't have a separate end-date; it ends when the deposit matures or is withdrawn</td></tr>
<tr><td>SLR Exemption</td><td>Also exempt from SLR maintenance</td><td>Both CRR (para 20/21 in respective Directions) and SLR (para 28/29 in respective Directions) are explicitly exempt — not just CRR</td></tr>
</tbody>
</table>
</div>
<!-- HOW IT WORKS — MECHANISM -->
<h2>How the Full Mechanism Works — Step by Step</h2>
<div class="mech-flow">
<div class="mf-row">
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<h5>NRI Opens FCNR(B) USD Deposit (June 8 – Sep 30, 2026)</h5>
<p>An NRI approaches any bank with US dollars and opens a 3–5 year FCNR(B) USD deposit. The bank books this as a fresh FCNR(B) deposit in its books within the qualifying window.</p>
</div>
</div>
<div class="mf-arrow">↓</div>
<div class="mf-row">
<div class="mf-num">2</div>
<div class="mf-step">
<h5>Bank Accesses RBI's USD-Rupee Swap Facility</h5>
<p>The bank sells the USD to RBI under the swap facility at a fixed exchange rate (forward rate). RBI provides INR to the bank. This eliminates exchange rate risk for the bank — it knows the exact cost of converting back to USD when the deposit matures.</p>
</div>
</div>
<div class="mf-arrow">↓</div>
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<div class="mf-num">3</div>
<div class="mf-step">
<h5>Bank Deploys 100% of INR for Lending/Investment</h5>
<p>Since the FCNR(B) deposits are exempt from CRR and SLR, the bank can deploy the full INR proceeds for lending to borrowers or investing in assets — no portion is locked up as mandatory reserves earning zero or below-market returns.</p>
</div>
</div>
<div class="mf-arrow">↓</div>
<div class="mf-row">
<div class="mf-num">4</div>
<div class="mf-step">
<h5>RBI Gains USD Reserves — Rupee Support</h5>
<p>RBI accumulates US dollar reserves from the swap transactions. These reserves can be used to support the Indian Rupee in the currency market, reduce INR volatility, and build India's <a href="/glossary/foreign-exchange" class="text-gold font-semibold hover:underline" title="Foreign Exchange definition">foreign exchange</a> buffer — the underlying macroeconomic objective of the scheme.</p>
</div>
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<div class="mf-arrow">↓</div>
<div class="mf-row">
<div class="mf-num">5</div>
<div class="mf-step">
<h5>At Maturity — Bank Buys USD from RBI, Repays NRI Depositor</h5>
<p>When the deposit matures (3–5 years later), the bank buys USD from RBI at the pre-agreed forward rate (completing the swap), repays the NRI depositor in USD (principal + interest), and the scheme comes full circle. The forward leg of the swap protects the bank from any USD appreciation risk during the deposit period.</p>
</div>
</div>
</div>
<!-- WHY NOW — MACROECONOMIC CONTEXT -->
<h2>Why Did RBI Do This Now? — Macroeconomic Context</h2>
<div class="hb purple">
<h4>🌎 India's Foreign Exchange Management Strategy</h4>
<p>The June 2026 FCNR(B) scheme is part of RBI's larger toolkit for managing India's external sector. Key drivers:</p>
<ul>
<li><strong>Rupee management:</strong> Foreign capital inflows through FCNR(B) deposits increase dollar supply in India, providing natural support to the INR exchange rate without directly depleting forex reserves</li>
<li><strong>Forex reserve building:</strong> The USD-Rupee swap allows RBI to accumulate dollar reserves, strengthening India's import cover and reducing vulnerability to external shocks</li>
<li><strong>NRI engagement:</strong> NRI remittances and deposits are a major and relatively stable source of foreign capital. A well-structured FCNR(B) scheme makes India's deposit market more competitive globally</li>
<li><strong>Monetary transmission:</strong> By providing banks with lower-cost dollar funding (exempt from CRR/SLR), RBI helps banks offer competitive NRI deposit rates, attracting flows that support domestic liquidity</li>
</ul>
</div>
<h3>Historical Precedent — FCNR(B) Schemes Before 2026</h3>
<div class="tw">
<table class="tt">
<thead><tr><th>Year</th><th>Context</th><th>Scheme</th><th>Result</th></tr></thead>
<tbody>
<tr><td>2013</td><td>Severe INR depreciation (USD/INR touched 68); current account deficit crisis</td><td>FCNR(B) scheme with RBI swap and CRR/SLR exemption; mobilisation window 3 months</td><td>Banks mobilised approximately USD 34 billion; INR stabilised significantly</td></tr>
<tr><td>2022</td><td>Post-COVID currency pressures; USD/INR crossed 82; global dollar strengthening</td><td>FCNR(B) CRR/SLR exemption announced; window June–October 2022</td><td>Moderate inflows; INR pressure eased over subsequent months</td></tr>
<tr><td><strong>2026</strong></td><td><strong>Global uncertainty, USD strength, INR management needs</strong></td><td><strong>USD-Rupee swap + CRR/SLR exemption; window June 8 – September 30, 2026; all bank categories covered</strong></td><td><strong>Announced — results pending</strong></td></tr>
</tbody>
</table>
</div>
<!-- IMPACT ON DIFFERENT BANKS -->
<h2>Impact on Different Categories of Banks</h2>
<div class="bank-grid">
<div class="bank-card">
<span class="bank-icon">🏛</span>
<h5>Commercial Banks</h5>
<p>Largest players in NRI banking. Large private banks (HDFC, ICICI, Axis, Kotak) and PSU banks (SBI, Bank of Baroda) with significant NRI branch networks or overseas presence are best positioned to mobilise FCNR(B) dollars quickly. For them, the economics are most compelling given their global reach.</p>
<span class="bank-ref">Notification 13471 | RBI/2026-27/102</span>
</div>
<div class="bank-card">
<span class="bank-icon">🏨</span>
<h5>Small Finance Banks</h5>
<p>Smaller institutions with limited NRI customer base. The exemption applies equally but practical mobilisation capacity is lower. Some SFBs with diaspora-heavy service areas may benefit. SLR exemption is particularly valuable given SFBs typically have lower surplus liquidity to invest in G-Secs.</p>
<span class="bank-ref">Notification 13472 | RBI/2026-27/103</span>
</div>
<div class="bank-card">
<span class="bank-icon">🏠</span>
<h5>Urban Co-operative Banks</h5>
<p>UCBs typically serve urban communities including merchant communities and diaspora networks with strong ties to specific geographies. The inclusion of UCBs acknowledges their role in NRI deposit mobilisation in cities like Mumbai, Surat, and Pune. Legal authority additionally invokes Section 56(AACS) of BR Act applicable to co-operative institutions.</p>
<span class="bank-ref">Notification 13473 | RBI/2026-27/104</span>
</div>
<div class="bank-card">
<span class="bank-icon">🌿</span>
<h5>Rural Co-operative Banks</h5>
<p>State and District Co-operative Banks serving agricultural and rural communities. Some rural communities have significant diaspora members in the Middle East and other countries. The inclusion signals RBI's intent to democratise access to this scheme across the banking spectrum. Practical mobilisation may be limited.</p>
<span class="bank-ref">Notification 13474 | RBI/2026-27/105</span>
</div>
<div class="bank-card">
<span class="bank-icon">🌈</span>
<h5>Regional Rural Banks</h5>
<p>43 RRBs serving semi-urban and rural areas with sponsor bank support. Like co-operative banks, RRBs are unlikely to mobilise large FCNR(B) volumes, but their inclusion signals universal applicability. RRBs may leverage their sponsor bank's NRI networks to attract eligible deposits.</p>
<span class="bank-ref">Notification 13475 | RBI/2026-27/106</span>
</div>
</div>
<!-- WHAT BANKS MUST DO -->
<h2>What Banks Need to Do — Compliance Steps</h2>
<div class="hb green">
<h4>✅ Action Points for Bank Compliance Teams</h4>
<ul>
<li><strong>Update Internal Systems:</strong> Configure core banking systems to tag qualifying FCNR(B) deposits (USD, 3–5 year tenor, mobilised June 8 – September 30, 2026) with a specific exemption code for CRR and SLR reporting purposes</li>
<li><strong>Prepare CRR Reporting:</strong> For the NDTL computation as on June 15, 2026, include these deposits in NDTL but mark them as exempt from CRR maintenance. From the July 1, 2026 fortnight, ensure these deposits are reflected in the new reporting line added in Annex A to Form A</li>
<li><strong>Update SLR Calculation:</strong> Ensure that qualifying FCNR(B) deposits are excluded from the SLR calculation base (NDTL) — or alternatively, ensure that the corresponding SLR is marked as exempt in regulatory reports (as per the amendment to the respective paragraphs in SLR reporting)</li>
<li><strong>Treasury and ALM:</strong> Asset-Liability Management teams should model the impact of potential FCNR(B) mobilisation on the bank's USD/INR position, the cost/benefit of the RBI swap facility, and the deployment strategy for INR proceeds within the CRR/SLR-free environment</li>
<li><strong>Product Team:</strong> Revise FCNR(B) product terms to ensure the scheme parameters (USD only, 3–5 year, window dates) are accurately communicated to NRI customers and relationship managers</li>
<li><strong>Track Expiry:</strong> The exemption is deposit-specific and runs for the life of the deposit. Banks must have systems to track each qualifying deposit and ensure exemption reporting continues until each specific deposit matures or is withdrawn</li>
</ul>
</div>
<!-- WHAT THIS MEANS FOR NRI DEPOSITORS -->
<h2>What This Means for NRI Depositors</h2>
<div class="hb orange">
<h4>👤 Should NRIs Consider FCNR(B) USD Deposits Now?</h4>
<p>The CRR/SLR exemption reduces the cost of FCNR(B) deposits for banks — which should allow banks to offer <strong>higher interest rates</strong> on qualifying FCNR(B) deposits compared to what they would otherwise offer. Combined with the RBI's swap facility reducing banks' exchange rate risk, NRI depositors may find the June–September 2026 window offers particularly competitive FCNR(B) rates.</p>
<p style="margin-top:10px;">Key considerations for NRIs:</p>
<ul>
<li><strong>Lock-in:</strong> FCNR(B) deposits of 3–5 years are a medium-to-long-term commitment. Premature withdrawal (before 1 year) earns no interest; after 1 year, it attracts a penalty</li>
<li><strong>No currency risk:</strong> Since deposits are in USD and repaid in USD, the NRI depositor bears no exchange risk — they get their dollars back regardless of where USD/INR moves during the deposit period</li>
<li><strong>Compare rates:</strong> Banks will compete for FCNR(B) deposits; compare rates across banks before committing</li>
<li><strong>Tax-free in India:</strong> FCNR(B) interest is exempt from Indian income tax for NRIs</li>
</ul>
</div>
<!-- LEGAL AUTHORITY -->
<h2>Legal Authority Behind These Notifications</h2>
<div class="tw">
<table class="tt">
<thead><tr><th>Legal Provision</th><th>Applicable To</th><th>Role</th></tr></thead>
<tbody>
<tr><td>Section 35A, Banking Regulation Act, 1949</td><td>All bank types</td><td>Empowers RBI to issue binding directions to banking companies in the public interest — primary power for all 5 notifications</td></tr>
<tr><td>Section 42, RBI Act, 1934</td><td>All bank types</td><td>Governs CRR maintenance requirements — the specific power for Cash Reserve Ratio regulation</td></tr>
<tr><td>Sections 18 & 24, Banking Regulation Act, 1949</td><td>All bank types</td><td>Section 18 relates to CRR; Section 24 relates to SLR maintenance — the statutory basis for CRR/SLR obligations and exemptions</td></tr>
<tr><td>Section 56 read with Section (AACS), BR Act, 1949</td><td>Urban and Rural Co-operative Banks only</td><td>Makes the Banking Regulation Act applicable to co-operative societies — the legal bridge that allows RBI to regulate co-operative banks under the same framework</td></tr>
</tbody>
</table>
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<h2>Frequently Asked Questions (FAQs)</h2>
<h3 style="color:var(--rbi2);font-size:.92rem;margin:15px 0 4px;">📚 Basics</h3>
<div class="fq">Q1. What are these five RBI notifications about?</div>
<div class="fa">These five notifications (RBI/2026-27/102 to 106), all dated June 8, 2026, implement the policy announced in the RBI Governor's Statement of June 5, 2026 regarding FCNR(B) deposits. They grant an exemption from CRR and SLR maintenance on fresh US Dollar FCNR(B) deposits of 3–5 year tenor mobilised by banks between June 8 and September 30, 2026. Separate notifications are issued for each category of banks: Commercial Banks, Small Finance Banks, Urban Co-operative Banks, Rural Co-operative Banks, and Regional Rural Banks.</div>
<div class="fq">Q2. What is FCNR(B) and who is it for?</div>
<div class="fa">FCNR(B) stands for Foreign Currency Non-Resident (Bank) — a fixed deposit account available to Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs). Unlike NRE accounts where deposits are in INR, FCNR(B) accounts are maintained in foreign currency (USD, GBP, EUR, JPY, CAD, AUD). Principal and interest are repaid in foreign currency at maturity, eliminating exchange rate risk for the depositor. FCNR(B) deposits have a minimum 1-year and maximum 5-year tenor, and interest income is fully tax-exempt in India for NRIs.</div>
<div class="fq">Q3. What are CRR and SLR, and why does being exempt from them matter?</div>
<div class="fa">CRR (Cash Reserve Ratio) is the percentage of a bank's Net Demand and Time Liabilities (NDTL) that must be kept as cash with RBI (currently 4%). SLR (Statutory Liquidity Ratio) is the percentage of NDTL that banks must maintain in liquid assets like government securities (currently 18%). Together, they mean banks can only deploy about 78% of deposits for lending. By exempting FCNR(B) deposits from both, banks can deploy 100% of these dollar deposits productively, significantly improving the economics and allowing them to offer higher rates to NRI depositors.</div>
<div class="fq">Q4. What is the USD-Rupee swap facility announced by the Governor?</div>
<div class="fa">The USD-Rupee swap facility allows banks to convert the USD received from FCNR(B) deposits into INR using a swap transaction with RBI at a pre-agreed rate. The bank gets INR upfront (the "buy leg" of the swap) and commits to returning USD to RBI at a fixed forward exchange rate when the deposit matures (the "sell leg"). This eliminates the bank's currency risk on FCNR(B) deposits — the bank knows exactly how many rupees it will need to buy dollars for repayment, enabling it to price the deposits more competitively.</div>
<h3 style="color:var(--rbi2);font-size:.92rem;margin:15px 0 4px;">⚖ Regulatory</h3>
<div class="fq">Q5. From when does the CRR exemption actually apply?</div>
<div class="fa">The CRR exemption begins from the <strong>reporting fortnight beginning July 1, 2026</strong>, which is based on the NDTL computation as on June 15, 2026. Even though banks can start mobilising qualifying FCNR(B) deposits from June 8, 2026, the CRR exemption does not apply in the fortnight beginning June 15 (i.e., the June 1–14 reporting period). Banks may need to hold CRR on these deposits for the brief period between mobilisation and July 1 if the deposit is booked between June 8 and June 14.</div>
<div class="fq">Q6. Does this exemption apply to FCNR(B) deposits in currencies other than USD?</div>
<div class="fa">No. These notifications specifically implement the policy for US Dollar FCNR(B) deposits — consistent with the Governor's Statement which announced a "US Dollar-Rupee swap facility." FCNR(B) deposits denominated in other permitted currencies (GBP, EUR, JPY, CAD, AUD) do not benefit from the CRR/SLR exemption under these specific notifications. If RBI extends the scheme to other currencies in future, separate notifications would be required.</div>
<div class="fq">Q7. Are banks required to mobilise FCNR(B) deposits to avail this exemption, or is it optional?</div>
<div class="fa">Entirely optional. The CRR/SLR exemption is an incentive — not an obligation. Banks are free to choose whether to actively mobilise FCNR(B) USD deposits under this scheme. Those that do mobilise qualifying deposits automatically benefit from the exemption on those specific deposits as long as they remain in the bank's books. Banks that do not mobilise FCNR(B) deposits face no penalty and continue operating under their regular CRR/SLR obligations.</div>
<div class="fq">Q8. Why were five separate notifications issued instead of one?</div>
<div class="fa">Each category of banks in India is regulated by different Master Directions for CRR and SLR — Commercial Banks have their own directions, Small Finance Banks have separate directions, and each co-operative bank category has its own framework. Amendments to each set of directions require separate notifications. This is standard RBI practice — a single policy change (like FCNR(B) exemption) requires parallel amendments to each bank category's regulatory framework. The five notifications are substantively identical in the exemption granted but technically amend five different regulatory documents.</div>
<div class="fq">Q9. What happens to the CRR exemption if the deposit is withdrawn prematurely?</div>
<div class="fa">The notification states the exemption is available "for the original deposit amounts till such time the deposits are held in the bank books." If a qualifying FCNR(B) deposit is withdrawn prematurely, the exemption ceases from the date of withdrawal. Banks would need to reflect the removal of the exemption in their subsequent CRR/SLR computations. Note that FCNR(B) deposits withdrawn before completing 1 year from the date of deposit earn no interest; after 1 year, premature withdrawal is permitted with a penalty as per RBI/bank terms.</div>
<div class="fq">Q10. How does this compare to the 2013 FCNR(B) scheme?</div>
<div class="fa">The 2013 scheme was a landmark intervention during India's taper tantrum crisis when the INR fell sharply. RBI offered a concessional swap rate plus CRR/SLR exemption. The result was approximately USD 34 billion inflows, which significantly stabilised the INR. The 2026 scheme follows the same structural approach — swap facility plus CRR/SLR exemption — though the quantum of inflows and the prevailing macroeconomic context are different. A key difference is that the 2026 notifications explicitly cover all five bank categories (including RRBs and co-operative banks), whereas the 2013 scheme was primarily targeted at scheduled commercial banks.</div>
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<h2>Conclusion</h2>
<p>The five RBI notifications of June 8, 2026 are a coordinated, well-structured policy intervention to attract foreign currency inflows into India through the FCNR(B) route. By simultaneously amending CRR and SLR directions for all five categories of banks — Commercial, Small Finance, Urban Co-operative, Rural Co-operative, and Regional Rural Banks — RBI has created a level playing field where every bank in India can participate in this scheme, regardless of its size or segment. The combination of the USD-Rupee swap facility (announced on June 5) and the CRR/SLR exemption (implemented on June 8) is a powerful twin incentive for banks to aggressively mobilise NRI dollar deposits in the coming months.</p>
<p>For banks, compliance teams must act quickly: update CRR/SLR reporting systems to correctly track qualifying deposits, engage treasury teams on the swap strategy, and ensure product documentation is accurate. For NRI depositors, this window offers a potentially advantageous time to lock in competitive FCNR(B) rates on dollar deposits. For the broader Indian economy, successful mobilisation would strengthen forex reserves, support INR stability, and provide banks with stable long-tenor foreign currency funding.</p>
<div class="disc">
<strong>Disclaimer:</strong> This article is for educational and informational purposes only, based on the five RBI Amendment Directions notifications issued on June 8, 2026 (RBI/2026-27/102 to 106) and the Governor's Statement of June 5, 2026. While every effort has been made to ensure accuracy, this does not constitute legal, banking, regulatory, or investment advice. Banks and NRI depositors should refer to the official RBI notifications on rbi.org.in and consult their legal/compliance teams or financial advisers for guidance specific to their circumstances. RBI regulations are subject to change.
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