Date: 2022-07-06Category: Not ApplicableState: Union GovernmentCountry: India
Section 42 of the Reserve Bank of India Act, 1934 and Section 18 and 24 of the Banking Regulation Act, 1949 – FCNR (B)/NRE Term deposits - Exemption from maintenance of CRR/SLR
**Summary:**
This Reserve Bank of India (RBI) directive, reference number RBI/2022-23/83 DOR.RET.REC.54/12.01.001/2022-23, issued on July 6, 2022, addresses an exemption from the maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) for Foreign Currency Non-Resident (Bank) [FCNR(B)] and Non-Resident External (Rupee) [NRE] term deposits under Section 42 of the Reserve Bank of India Act, 1934, and Sections 18 and 24 of the Banking Regulation Act, 1949.
Effective from the reporting fortnight beginning July 30, 2022, incremental FCNR(B) deposits and NRE Term deposits, mobilized by banks with reference to a base date of July 1, 2022, will be exempt from CRR and SLR requirements. This exemption applies to the incremental deposit amount exceeding the deposit balance as of the base date. Transfers from Non-Resident Ordinary (NRO) accounts to NRE accounts will not qualify for this exemption.
This exemption is valid for deposits raised until November 4, 2022, and the exemption on reserves maintenance will be available for the original deposit amounts for as long as the deposits are held in the bank's books.
The circular is applicable to all Scheduled Commercial Banks (including Regional Rural Banks, Local Area Banks, Small Finance Banks, and Payments Banks), Primary Urban Co-operative Banks (UCBs), and State and Central Co-operative Banks (StCBs/CCBs).
For further information, contact Prakash Baliarsingh, Chief General Manager, Department of Regulation, Central Office, Reserve Bank of India, 12th/13th Floor, Central Office Building, Shaheed Bhagat Singh Marg, Mumbai – 400001. Telephone: 22601000, Fax: 022-2270 5670, 2260 5671, 2270 5691, 2260 5692.
Key Entities Referenced
Reserve Bank of India Act, 1934: A legislative act that governs the Reserve Bank of India.
Banking Regulation Act, 1949: A legislative act related to banking regulation in India.
Scheduled Commercial Banks: A category of banks regulated by the Reserve Bank of India.
Regional Rural Banks: Regional level banking institutions in India.
Small Finance Banks: A type of bank in India focused on financial inclusion.
Payments Banks: A type of bank in India that can accept deposits and provide payment services.
Foreign Currency Non-Resident Bank (FCNR B): A type of deposit account maintained in foreign currency by non-resident Indians.
Non-Resident External Rupee (NRE): A type of deposit account maintained in Indian rupees by non-resident Indians.
भारतीय �र ज़व� ब�क
RESERVE BANK OF INDIA
RBI/2022-23/83
DOR.RET.REC.54/12.01.001/2022-23 July 06, 2022
All Scheduled Commercial Banks (including Regional Rural Banks)
Local Area Banks, Small Finance Banks, Payments Banks
Primary (Urban) Co-operative Banks (UCBs)
State and Central Co-operative Banks (StCBs / CCBs)
Madam/Dear Sir,
Section 42 of the Reserve Bank of India Act, 1934 and Section 18 and 24 of the Banking
Regulation Act, 1949 – FCNR (B)/NRE Term deposits - Exemption from maintenance of
CRR/SLR
At present, banks are required to include all Foreign Currency Non-Resident (Bank) [FCNR (B)] and
Non-Resident (External) Rupee (NRE) deposit liabilities for computation of Net Demand and Time
Liabilities (NDTL) for maintenance of CRR and SLR.
2. Banks are advised that with effect from the reporting fortnight beginning July 30, 2022, incremental
FCNR (B) deposits as also NRE Term deposits with reference to base date of July 1, 2022, mobilised
by banks will be exempt from maintenance of CRR and SLR. To amplify, if a bank had total FCNR (B)
deposit of say USD 100 as on the base date, and mobilises an incremental deposit of say USD 20,
that portion of USD 20 will not be part of liabilities reckoned for the purpose of NDTL computation for
CRR and SLR maintenance with effect from the fortnight beginning July 30, 2022. The same principle
will apply for calculation of NRE Term deposits for exemption from maintenance of CRR/SLR
requirements. However, any transfer from Non-Resident (Ordinary) (NRO) accounts to NRE accounts
will not qualify for such exemptions.
3. The above exemptions are valid for deposits raised till November 04, 2022. The exemption on
reserves maintenance will be available for the original deposit amounts till such time the deposits are
held in the bank books.
Yours faithfully
(Prakash Baliarsingh)
Chief General Manager
िविनयमन िवभाग, क�द्रीय काया�लय, 12वी ंऔर 13वी ंमंिज़ल, क�द्रीय काया�लय भवन, शहीद भगत िसंह माग�, मुंबई 400001
टेलीफोन /Tel No: 22601000 फै�/ Fax No: 022-2270 5670, 2260 5671, 5691 2270, 2260 5692
Department of Regulation, Central Office, 12th & 13th Floor, Central Office Building, Shaheed Bhagat Singh Marg, Mumbai – 400001
Tel No: 22601000 Fax No: 022-2270 5670, 2260 5671, 5691 2270, 2260 5692
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