Regulatory Updates
Aug-Sep 2026
1. RESERVE BANK OF INDIA UPDATES
Temporary Relaxation in Interest Rates on NRE and FCNR(B) Deposits Brought to an Early Close
The Reserve Bank of India (“RBI”) has brought forward the expiry of the temporary relaxation in interest rates payable on certain Non-Resident External (“NRE”) and Foreign Currency NonResident (Bank) (“FCNR(B)”) deposits from September 30, 2026 to August 31, 2026.
The change has been implemented through six separate amendment directions applicable to Commercial Banks, Small Finance Banks, Regional Rural Banks, Local Area Banks, Urban Cooperative Banks and Rural Co-operative Banks. The amendments replace the reference to September 30, 2026 with August 31, 2026 in the relevant provisions governing NRE and FCNR(B) deposits. Accordingly, the relaxed interest-rate regime applies only to eligible deposits contracted or renewed on or before August 31, 2026. From September 1, 2026, the normal interest-rate ceilings applicable to fresh and renewed NRE and FCNR(B) deposits will apply.
Banks should accordingly review their interest-rate cards, deposit booking systems, renewal instructions and customer-facing communications to ensure that the revised deadline is reflected across all channels.
CRR and SLR Exemption for Specified NRE and FCNR(B) Deposits Brought to an Early Close
RBI has also brought forward the expiry of the temporary exemption from maintenance of Cash Reserve Ratio (“CRR”) and Statutory Liquidity Ratio (“SLR”) in respect of specified fresh NRE and FCNR(B) deposits from September 30, 2026 to August 31, 2026.
The amendment applies to Commercial Banks, Small Finance Banks, Regional Rural Banks, Urban Co-operative Banks and Rural Co-operative Banks. The relevant amendment directions replace September 30, 2026 with August 31, 2026 in the provisions relating to the exemption.
Consequently, only eligible deposits mobilised or renewed on or before August 31, 2026 will qualify for the exemption. From September 1, 2026, fresh and renewed deposits falling within the relevant categories will be subject to the applicable CRR and SLR requirements.
Banks should review their reserve-computation processes, deposit classification and renewal instructions to ensure that deposits accepted or renewed from September 1, 2026 are treated in accordance with the applicable CRR and SLR framework. Internal and customer-facing material referring to September 30, 2026 should also be updated.
Revised Concentration Risk Framework for Upper Layer IDFNBFCs
RBI has amended the concentration risk framework applicable to Infrastructure Debt Fund – NonBanking Financial Companies (“IDF-NBFCs”) classified in the Upper Layer of the scale-based regulatory structure.
The Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Fourth Amendment Directions, 2026 introduce a new paragraph 39A, under which an Upper Layer IDF-NBFC will be subject to the large exposure limits applicable to an NBFC-Infrastructure Finance Company (“NBFC-IFC”), instead of the standard concentration limits applicable to Upper Layer NBFCs.
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