RBI Waives Reserve Requirements On NRE Deposits To Attract Foreign Inflows And Support Rupee

New Delhi, Jun 20 (KNN) The Reserve Bank of India (RBI) has exempted banks from maintaining statutory reserve ratios on fresh Non-Resident (External) Rupee (NRE) term deposits of three years or more, mobilised between June 19 and September 30, 2026, as part of its measures to attract foreign capital and stabilise the rupee.

The exemption from the cash reserve ratio (CRR), currently at 3 per cent of a bank's deposits, and the statutory liquidity ratio (SLR), currently at 18 per cent, will apply to fresh NRE term deposits, including those renewed upon maturity, from the reporting fortnight beginning July 16, 2026. 

The RBI clarified that the exemption applies only to the original deposit amount for as long as it remains on the bank's books, and that transfers from Non-Resident Ordinary (NRO) accounts to NRE accounts will not qualify.

Extension of Earlier FCNR(B) Measures

The move extends a similar exemption already granted to fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits of three-to-five-year tenor. With both reserve ratios waived, banks can now deploy the entire deposit amount as loans, compared with the earlier framework under which only Rs 79 of every Rs 100 mobilised could be lent, with the remainder set aside for CRR and SLR requirements.

The exemptions are part of a broader package of measures the RBI announced on June 5 to attract dollar inflows, which also included the central bank bearing the full hedging cost on fresh three-to-five-year FCNR(B) deposits mobilised up to September 30, 2026, and a concessional forex swap facility to incentivise external commercial borrowings (ECBs) by public sector units.

Daily Reporting Requirement

Separately, the RBI has directed all authorised dealer category-I banks to submit daily data on FCNR(B) deposits, ECBs and overseas foreign currency borrowings (OFCBs) mobilised under the concessional swap facilities. 

Banks have been asked to furnish the data by 6 pm each day, excluding Saturdays and holidays, with a nil statement required on days without transactions. Data covering the period from June 8, 2026, when the swap facilities were first announced, is to be submitted along with the first reporting due on June 22, 2026.

(KNN Bureau)