Reserve Bank of India deposit rules for NRE and FCNR accounts
By , founder·5 min read·Published 2026-09-16

Short answer: On 11 September 2026 the Reserve Bank moved the last leg of its June deposit push back to 31 August 2026. Banks may no longer keep advances funded by fresh FCNR(B) and NRE term deposits out of their priority sector base for deposits raised after that date. It follows the 25 August amendment that ended the CRR and SLR exemption on the same deposits on the same date. Nothing changes for a deposit you have already booked, and nothing changes about repatriation or tax. What has gone is the reason banks were competing for your money.

RBI Closes the Last Leg of the NRE and FCNR Deposit Push

On 11 September 2026 the Reserve Bank moved the last leg of its June deposit push back to 31 August 2026. Banks may no longer keep advances funded by fresh FCNR(B) and NRE term deposits out of their priority sector base for deposits raised after that date. It follows the 25 August amendment that ended the CRR and SLR exemption on the same deposits on the same date. Nothing changes for a deposit you have already booked, and nothing changes about repatriation or tax. What has gone is the reason banks were competing for your money.

What the circular says

The document is the Reserve Bank of India (Priority Sector Lending, Targets and Classification) Third Amendment Directions, 2026, circular RBI/2026-27/256, FIDD.CO.PSD.BC.No.10/04.09.001/2026-27, dated 11 September 2026 and signed by Chief General Manager-in-Charge Nisha Nambiar.

It recites what the 7 August 2026 amendment had allowed banks to leave out of Adjusted Net Bank Credit:

a) advances against the fresh FCNR (B) deposits of minimum tenor of three years and maximum tenor of five years mobilised (including deposits that are renewed upon maturity) by the banks between June 08, 2026 and September 30, 2026, and b) advances against NRE term deposits of three years or more mobilised (including deposits that are renewed upon maturity) by the banks between June 19, 2026 and September 30, 2026.

Then it changes the date:

On a review, it has been decided to amend the date "September 30, 2026" to the date "August 31, 2026" for the aforesaid exemptions.

The amendment comes into force with immediate effect.

The three legs, and the order they fell

Read on its own the 11 September circular looks like housekeeping. Read against the two that came before it, it is the end of a package.

From 8 June 2026 for FCNR(B) deposits of three to five years, and from 19 June 2026 for NRE term deposits of three years and above, the Reserve Bank gave banks three reliefs at once on money raised from non-residents. Exemption from cash reserve ratio and statutory liquidity ratio maintenance. Freedom to price those deposits above the normal interest rate ceilings. And the right to keep advances funded from them out of the priority sector base. All three were set to run to 30 September 2026.

All three now end on 31 August 2026.

Date of amendment Circular What it ended
25 August 2026 RBI/2026-27/243 The interest rate ceiling relaxation on fresh NRE and FCNR(B) deposits
25 August 2026 RBI/2026-27/238, DOR.RET.REC.205/12.01.001/2026-27 The CRR and SLR exemption, at paragraphs 20(8) and 20(9)
11 September 2026 RBI/2026-27/256 The priority sector exclusion from Adjusted Net Bank Credit

We wrote up the first of those when it landed, in NRE and FCNR rate caps are back from 1 September. The other two are the machinery behind it. The rate relaxation was the offer you saw. The CRR, SLR and priority sector relief was what made the offer worth a bank's while.

What this means for you

Little, and that is worth saying rather than dressing it up.

Your existing deposit is not repriced. The circulars amend what banks may do with deposits mobilised in a window, and the window is now closed. A deposit booked in July at a sharp rate runs to maturity on its contract.

Nothing about repatriation or tax changed. All three amendments are addressed to what banks may do with their own balance sheets. None of them mentions repatriation limits, account eligibility, or how interest on an NRE or NRO deposit is taxed in your hands.

What has changed is the pricing environment for your next deposit. If you sold a flat and parked the proceeds, or you are moving accumulated rent out of an NRO account, the special rates that ran through June, July and August have no regulatory support behind them any more. Compare quotes on the rate you are shown now rather than the rate a bank quoted you in July.

What we do not know yet

The Reserve Bank gave no reason beyond the words "on a review" in each of the three amendments. It has not said whether a similar window will open again. Read the next set of deposit amendments when they come rather than assuming either way.

FAQ

Will my existing NRE or FCNR deposit be repriced?

No. The three amendments change what a bank may do with deposits mobilised inside a window, and that window closed on 31 August 2026. A deposit already booked runs to maturity on the terms in its contract.

Why were NRE and FCNR rates higher in June, July and August 2026?

Because the Reserve Bank had given banks three reliefs at once on those deposits. Exemption from CRR and SLR maintenance, freedom to price above the normal interest rate ceilings, and the right to keep advances funded from them out of the priority sector base. The first two ended by the amendment of 25 August 2026 and the third by the circular of 11 September 2026, all with effect from 31 August 2026.

Does this change how much I can repatriate from an NRO account?

No. All three amendments are addressed to banks and their balance sheets. None of them mentions repatriation limits, account eligibility, or the tax treatment of interest in your hands.

Saurabh Garg, founder, 66 MG Road

Sources

Information on this page is as on 2026-09-16. Rules, rates, deadlines and government portals change without notice, so verify against the official source before you act. This page is for information only. It is not tax or legal advice, and it is not a substitute for a qualified adviser who knows your position.