RBI Priority Sector Lending Third Amendment Directions, 2026: FCNR(B) and NRE Exemption Cut-Off Date Changed

RBI has changed the relevant cut-off date from September 30, 2026 to August 31, 2026 for specified advances against qualifying fresh FCNR(B) and NRE deposits that are excluded from Adjusted Net Bank Credit (ANBC) for the purpose of calculating priority sector lending targets. The amendment is contained in the RBI/2026-27/256 directions dated September 11, 2026 and comes into force with immediate effect.

What Changed Under the RBI Third Amendment Directions, 2026?

The amendment changes the date relevant to certain advances that are excluded from Adjusted Net Bank Credit (ANBC) while calculating priority sector lending targets. The earlier provision referred to September 30, 2026; RBI has now replaced that date with August 31, 2026.

Which Advances Are Covered?

The amendment relates to advances extended in India against specified fresh FCNR(B) deposits and NRE term deposits where the underlying deposits qualify for exemption from CRR and SLR requirements under the RBI directions referred to in the provision.

RBI's amendment specifically changes the relevant end date from September 30, 2026 to August 31, 2026 for these exemptions.

What Is the Limit on the Amount Excluded From ANBC?

The amendment retains an important limitation: the amount excluded from ANBC for calculating priority sector lending targets must not exceed the fresh outstanding FCNR(B) and NRE deposits that are eligible for exemption from CRR and SLR requirements under the relevant RBI amendment directions.

This means the ANBC exclusion is linked to the amount of qualifying fresh outstanding deposits rather than being an unrestricted deduction from ANBC.

Which Provision Has Been Modified?

RBI has partially modified Item No. VI in the table under paragraph 6.1 of the Priority Sector Lending Directions. The amended text refers to advances extended in India against fresh FCNR(B)/NRE deposits that qualify for exemption from CRR and SLR requirements under the relevant RBI amendment directions.

The amendment therefore operates within the existing framework for determining ANBC for priority sector lending purposes rather than introducing a separate standalone category of lending.

Why Does This Change Matter?

The date change matters because ANBC is used as a base for the calculation of priority sector lending targets. A change in the amount excluded from ANBC can therefore affect the base against which a bank's priority sector lending target is assessed.

For banks using the relevant FCNR(B) or NRE deposit-backed advances, the revised cut-off means that transactions relying on the special exclusion must now be tested against the August 31, 2026 date rather than September 30, 2026.

The source does not state that the underlying CRR or SLR exemption itself has been withdrawn. The amendment instead changes the date used in the PSL/ANBC exclusion provision. That distinction is important when assessing the operational impact of the amendment.

Who Is Affected?

• Banks calculating priority sector lending targets — particularly banks with advances against qualifying fresh FCNR(B) or NRE deposits that may fall within the specified exclusion.
• Treasury and regulatory reporting functions — because the revised cut-off must be reflected in the ANBC calculation process.
• Priority sector compliance teams — which should ensure that the revised date is applied consistently when determining the ANBC base.
• Internal audit and control functions — where relevant, because the eligibility and amount of the exclusion should be supported by the underlying deposit and exemption records.

Practical Implications for Banks

The most immediate operational consequence is a need to update the relevant ANBC calculation logic, working papers and internal reference materials so that the revised August 31, 2026 cut-off is used.

Banks applying the exclusion should also reconcile the amount being removed from ANBC with the fresh outstanding FCNR(B)/NRE deposits eligible for CRR/SLR exemption, because RBI expressly limits the ANBC exclusion to that eligible amount.

The source does not prescribe a new filing form, separate approval or standalone compliance certificate under this amendment. Accordingly, the practical response should focus on correct application of the revised date and maintenance of adequate supporting records rather than creating a new compliance process not specified by RBI.

What Should Banks Do Now?

Frequently Asked Questions

What is the RBI Third Amendment Directions, 2026?
It is an amendment to the Reserve Bank of India (Priority Sector Lending – Targets and Classification) Directions, 2025 dealing with the treatment of specified FCNR(B) and NRE deposit-backed advances in ANBC calculations.

What is the main change?
RBI has changed the relevant cut-off date from September 30, 2026 to August 31, 2026 for the specified ANBC exclusion.

The amendment follows the RBI (Priority Sector Lending – Targets and Classification) Second Amendment Directions, 2026 issued on August 7, 2026, which had introduced the specified ANBC exclusions for advances against qualifying fresh FCNR(B) and NRE deposits. The September 11, 2026 amendment now revises the end date applicable to those exclusions.

Which deposits are relevant?
The provision covers specified fresh FCNR(B) deposits and NRE term deposits that qualify for exemption from CRR and SLR requirements under the referenced RBI directions.

What was the earlier cut-off date?
The earlier date was September 30, 2026. RBI has amended it to August 31, 2026.

Does the amendment change the CRR/SLR exemption itself?
The uploaded amendment changes the ANBC exclusion provision and its cut-off date. It does not state that the underlying CRR/SLR exemption categories are abolished.

Is there a cap on the amount that can be excluded from ANBC?
Yes. The excluded amount cannot exceed the fresh outstanding FCNR(B)/NRE deposits eligible for CRR/SLR exemption under the referenced amendment directions.

When does the amendment take effect?
The amendment comes into force with immediate effect from September 11, 2026.

Which provision has been amended?
Item No. VI in the table under paragraph 6.1 has been partially modified.

CorpLawUpdates Analysis

This amendment is narrow but operationally relevant because it changes the cut-off date used in an existing ANBC exclusion. The one-month movement from September 30 to August 31, 2026 reduces the period during which qualifying fresh FCNR(B) and NRE deposit-backed advances can fall within the specified PSL/ANBC treatment.

For banking compliance teams, the principal risk is not misunderstanding the headline amendment but applying the revised date inconsistently across treasury records, deposit eligibility checks and ANBC calculations. The amount excluded must also remain within the fresh outstanding deposit amount eligible for the relevant CRR/SLR exemption.

The amendment should therefore be read alongside the underlying CRR/SLR exemption directions referenced in the provision. The uploaded document establishes the revised PSL/ANBC treatment and its effective date; it does not itself provide a new standalone framework for the underlying deposit exemptions.