**Executive Summary**
This document, dated January 22, 2026, issues Amendment Directions, 2026, regarding the Reserve Bank of India (Local Area Banks – Cash Reserve Ratio and Statutory Liquidity Ratio). These directions amend the 2025 directions to incorporate changes resulting from the enactment of the Banking Laws (Amendment) Act, 2025. The changes are effective immediately.
**Key Points / Main Content**
* **Amendments to RBI (Local Area Banks) Directions, 2025:**
* Paragraph 16 (1): Insert the phrase "other development financial institutions as defined in section 2 (cccii) of the RBI Act, 1934."
* Paragraph 23 (5) (v): Delete the words "under 'Cash in hand'."
* **Amendments to Annex I (Form A):**
* Substitute "National Bank for Agriculture and Rural Development, Export Import Bank of India" with "the Exim Bank, the National Housing Bank, the National Bank, the Small Industries Bank, the National Bank for Financing Infrastructure and Development or the other development financial institution."
* **Amendments to Annex II (Form VIII):**
* Substitute "Export-Import Bank of India and National Bank for Agriculture and Rural Development" with "Exim Bank, National Bank, National Housing Bank, Small Industries Bank, National Bank for Financing Infrastructure and Development and other development financial institutions as defined in section 2 (cccii) of the Reserve Bank of India Act, 1934".
* Substitute "specified" with "notified" and delete the words "from time to time."
* Insert a new item: "Amount deposited with the Reserve Bank, under Standing Deposit Facility Scheme."
**Impact Analysis**
**Local Area Banks (LABs)**
* **Impact:** LABs must adhere to the revised requirements for Cash Reserve Ratio and Statutory Liquidity Ratio. Changes to reporting formats (Annex I and II) necessitate adjustments in their reporting processes.
* **Action Required:** LABs must immediately update their internal policies and reporting mechanisms to reflect these amendments. They should also ensure staff are informed and trained on the changes.
**Reserve Bank of India (RBI)**
* **Impact:** The RBI is responsible for overseeing the implementation of the amended directions and ensuring LABs' compliance.
* **Action Required:** The RBI must monitor LABs' adherence to the revised guidelines and may need to update its supervisory processes.
Key Entities Referenced
Reserve Bank of India (Local Area Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Amendment Directions, 2026: The primary subject of the document, outlining amendments to directions regarding cash reserve ratio and statutory liquidity ratio for local area banks.
Banking Laws (Amendment) Act, 2025: Act that necessitated changes to banking regulations, triggering the current amendment directions.
Reserve Bank of India (Local Area Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025: The existing directions that are being amended by the current document.
Banking Regulation Act, 1949: Act under which the powers are conferred to Section 35A.
RBI Act, 1934: Act under which the powers are conferred to Section 42.
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
RBI/2025-26/201
DOR.RET.REC.398/12.01.001/2025-26 January 22, 2026
Reserve Bank of India (Local Area Banks – Cash Reserve Ratio and Statutory
Liquidity Ratio) Amendment Directions, 2026
Please refer to Reserve Bank of India (Local Area Banks – Cash Reserve Ratio and
Statutory Liquidity Ratio) Directions, 2025 dated November 28, 2025.
2. Pursuant to the enactment of the Banking Laws (Amendment) Act, 2025, the
Banking Regulation (Companies) Amendment Rules, 2025 and the Reserve Bank of
India Scheduled Banks' (Amendment) Regulations 2025 have been published in the
Gazette of India dated December 10, 2025 and January 15, 2026 respectively.
3. Accordingly, in exercise of the powers conferred by Section 35A of the Banking
Regulation Act, 1949 and pursuant to Section 42 of the Reserve Bank of India Act,
1934 and Sections 18 and 24 of Banking Regulation Act, 1949, as amended from time
to time, and all other provisions / laws enabling the Reserve Bank of India in this
regard, the Reserve Bank being satisfied that it is necessary and expedient in the
public interest so to do, hereby, issues the Amendment Directions hereinafter
specified.
4. These Directions shall be called the Reserve Bank of India (Local Area Banks –
Cash Reserve Ratio and Statutory Liquidity Ratio) Amendment Directions, 2026.
5. The provisions shall come into force with immediate effect.
6. These Amendment Directions modify the Reserve Bank of India (Local Area Banks
– Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025 as under:
(i) In paragraph 16 (1), the words "other development financial institutions as
defined in section 2 (cccii) of the RBI Act, 1934" shall be inserted.
_______________________________________________________________________________________________________________________________________
विवियमि विभाग, केंद्रीय कायाालय, 12िी ींऔर 13िी ींमींव़िल, िरीमि भिि, िरीमि पॉइींट, म ींबई 400021
Department of Regulation, Central Office, 12th & 13th Floor, Nariman Bhavan, Nariman Point, Mumbai 400021
बैंक व ींदी में पत्राचार का स्वागत करता ै
Caution: RBI never sends mails, SMSs or makes calls asking for personal information like bank account details, passwords,
etc. It never keeps or offers funds to anyone. Please do not respond in any manner to such offers.(ii) In paragraphs 23 (5) (v), the words ‘under "Cash in hand" ‘ shall be deleted.
(iii) In Annex I (Form A), the words "National Bank for Agriculture and Rural
Development, Export Import Bank of India" shall be substituted with "the Exim
Bank, the National Housing Bank, the National Bank, the Small Industries
Bank, the National Bank for Financing Infrastructure and Development or the
other development financial institution".
(iv) In Annex II (Form VIII),
• The words "Export-Import Bank of India and National Bank for Agriculture
and Rural Development" shall be substituted with "Exim Bank, National
Bank, National Housing Bank, Small Industries Bank, National Bank for
Financing Infrastructure and Development and other development
financial institutions as defined in section 2 (cccii) of the Reserve Bank of
India Act, 1934"
• The word "specified" shall be substituted with "notified" and words “from
time to time” shall be deleted.
• a new item “Amount deposited with the Reserve Bank, under Standing
Deposit Facility Scheme” shall be inserted.
Yours faithfully,
(Manoranjan Padhy)
Chief General Manager
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