RBI Cuts FCNR(B)/NRE ANBC Exemption Window to August 31 Under Third PSL Amendment
The Reserve Bank of India (RBI) has advanced the end date of a priority sector lending (PSL) relief linked to fresh FCNR(B) and NRE deposits. The Reserve Bank of India (Priority Sector Lending: Targets and Classification) Third Amendment Directions, 2026, reference RBI/2026-27/256, FIDD.CO.PSD.BC.No.10/04.09.001/2026-27 dated 11 September 2026, replace the cut-off of 30 September 2026 with 31 August 2026. The change took effect immediately. The directions are signed by Nisha Nambiar, Chief General Manager-in-Charge.
What the relief is
Banks must meet PSL targets computed on Adjusted Net Bank Credit (ANBC). Item VI in the table under paragraph 6.1 of the PSL directions lets banks exclude certain advances from ANBC, which lowers the base on which the target is calculated. The Second Amendment Directions of 7 August 2026 extended this exclusion to advances made out of fresh FCNR(B) and NRE deposits.
As substituted by the Third Amendment, Item VI now covers "advances extended in India out of the fresh FCNR (B) / NRE deposits (including deposits that are renewed upon maturity), qualifying for exemption from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements, as per the Reserve Bank of India (Cash Reserve Ratio and Statutory Liquidity Ratio) Fourth Amendment Directions dated August 25, 2026, as applicable to various banks."
Deposit windows after the change
| Deposit | Mobilised from | Mobilised up to (revised) | Earlier end date |
|---|---|---|---|
| Fresh FCNR(B) deposits | 8 June 2026 | 31 August 2026 | 30 September 2026 |
| Fresh NRE deposits | 19 June 2026 | 31 August 2026 | 30 September 2026 |
Deposits raised after 31 August 2026 do not support an ANBC exclusion under Item VI.
The cap on the exclusion
The note to Item VI keeps a ceiling: "The amount to be excluded from ANBC for computation of priority sector targets shall not exceed the outstanding FCNR (B) / NRE deposits eligible for exemption from maintenance of CRR / SLR in terms of the above Amendment Directions." A bank cannot exclude more advances than the eligible deposits still outstanding, so the exclusion shrinks as those deposits mature or are withdrawn.
Same date as the FCNR(B) swap window
The PSL change now tracks the CRR/SLR exemption under the Fourth Amendment Directions of 25 August 2026. It also matches the closure of RBI's special USD-INR swap window for FCNR(B) deposits. According to an RBI press release of 2 September 2026, the swap facility introduced on 8 June 2026 "was open till August 31, 2026 for FCNR(B) deposits, and will be open up to December 31, 2026 for ECBs and OFCBs." RBI's provisional data put inflows under the facility at USD 1,27,226 million through FCNR(B) deposits, USD 5,260 million through overseas foreign currency borrowings and USD 3,891 million through ECBs, a total of USD 1,36,377 million.
What banks should check
- Filter the deposit data so that only FCNR(B) deposits mobilised from 8 June and NRE deposits mobilised from 19 June, up to 31 August 2026, are counted, including renewals of such deposits.
- Confirm each deposit also qualifies for the CRR/SLR exemption under the 25 August 2026 directions.
- Reconcile advances claimed for exclusion with the outstanding balance of eligible deposits at each reporting date.
- Revisit any PSL computation prepared on the earlier 30 September cut-off.
Updated on 28 September 2026: added the exact substituted text of Item VI, the signatory, a table of deposit windows, and RBI's 2 September 2026 swap-facility data showing the same 31 August cut-off.
