FCNR(B)/NRE deposits – exemption from maintenance of CRR/SLR

RBI/2013-14/190
RPCD.CO.RRB/RCB.BC.No. 20 /03.05.33/2013-14

August 19, 2013

All Regional Rural Banks/
Scheduled State Cooperative Banks

Dear Sir,

Section 42(1) of the Reserve Bank of India Act, 1934 and Section 24 of the Banking Regulation Act, 1949 – FCNR(B)/NRE 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) and for maintenance of CRR and SLR.

2. Banks are advised that with effect from fortnight beginning August 24, 2013, incremental FCNR (B) deposits as also NRE deposits with reference base date of July 26, 2013, and having maturity of three years and above, mobilised by banks will be exempt from maintenance of CRR and SLR. To amplify, if a bank had a total FCNR (B) deposit base of say USD 100 as on the base date, and mobilises an incremental deposit of say USD 20, that portion of USD 20 which has a maturity of 3 years and above will not be part of NDTL and will qualify for CRR and SLR exemption. The same principle will apply for calculation of NRE deposits for exemption from maintenance of CRR/SLR requirements. However, any transfer from Non-Resident (Ordinary) (NRO) accounts to NRE accounts shall not qualify for such exemptions.

3. Please acknowledge receipt to our Regional Office concerned.

Yours faithfully,

(Madhavi Sharma)
Chief General Manager