The Reserve Bank of India has introduced additional regulatory relief for banks lending against eligible fresh Foreign Currency Non-Resident Bank, or FCNR(B), deposits and Non-Resident External term deposits.
Under the amended framework, qualifying loans extended in India against these deposits may be excluded from Adjusted Net Bank Credit when banks calculate their priority-sector lending targets. The exclusion cannot exceed the amount of eligible fresh deposits receiving the related cash-reserve and statutory-liquidity exemptions.
Eligible FCNR(B) deposits generally must have an original maturity of three to five years and be mobilized between June 8 and September 30, 2026. Qualifying NRE term deposits must generally have a maturity of at least three years and be mobilized between June 19 and September 30. Renewals completed within the applicable period may also qualify under the prescribed conditions.
The measure is designed to give banks greater flexibility in raising and lending against NRI deposits. It does not guarantee any particular interest rate, investment return or loan approval for individual customers. NRIs should compare currency exposure, maturity, withdrawal rules and bank-specific terms before depositing funds.
