FILE PHOTO: FILE PHOTO: The Reserve Bank of India (RBI) logo is pictured outside its head office in Mumbai November 2, 2010. REUTERS/Danish Siddiqui/File Photo//File Photo/File Photo | Photo Credit: DANISH SIDDIQUI

The Reserve Bank of India has now exempted banks from maintaining statutory reserve ratios on fresh Non-Resident (External) Rupee (NRE) term deposits of three years or more tenor mobilised by the banks between June 19, 2026 and September 30, 2026 as part of its limited period measures to attract foreign capital.

The central bank has already exempted fresh 3-5 year Foreign Currency Non-Resident (Bank)/ FCNR (B) deposits from statutory reserve ratios – cash reserve ratio (CRR) and statutory liquidity ratio (SLR) as part of the aforementioned measures.

The exemption from maintenance of CRR (currently at 3 per cent of a bank’s deposits) and SLR (currently at 18 per cent of a bank’s deposits) will encourage banks to offer higher interest rates on deposits as they will be able to deploy the full deposit proceeds as loans.

Hitherto, for every ₹100 deposit mobilised by a bank, it could give out ₹79 as a loan, with ₹3 being parked with RBI as CRR and ₹21 being invested in government securities. Now, with the exemption from maintaining both these reserve ratios, banks can give the full deposit amount mobilised as a loan.

Fresh NRE term deposits

RBI said fresh NRE term deposits of tenor of three years or more mobilised (including deposits that are renewed upon maturity) by banks between June 19, 2026 and September 30, 2026 are exempt from maintenance of CRR from the reporting fortnight beginning July 16, 2026 (based on the NDTL/ net demand and time liability computation as on June 30, 2026) and subsequent fortnights thereafter.

The exemption on reserves maintenance is available for the original deposit amounts till such time the deposits are held in the bank books. Any transfer from Non-Resident (Ordinary) (NRO) accounts to NRE accounts will not qualify for such exemptions.

Published on June 19, 2026