The Reserve Bank of India has issued amendment directions for small finance banks that temporarily remove two pricing constraints on non-resident deposits. From the date of issue until September 30, 2026, small finance banks may offer interest rates without the usual ceiling on fresh Foreign Currency Non-Resident Bank deposits with tenors of three years to five years, and without the usual restriction on fresh Non-Resident External deposits with tenors of three years and above. The temporary relief also covers deposits renewed on maturity. Transfers from Non-Resident Ordinary accounts to Non-Resident External accounts do not qualify for the exemption. Outside these carve-outs, the directions continue to provide that rates on NRE and NRO deposits should not exceed those offered on comparable domestic rupee term deposits, and that FCNR(B) deposits with tenors of one year to less than three years remain capped at the overnight alternative reference rate or swap rate for the relevant currency plus 250 basis points.
Reserve Bank of India2026-06-17
Reserve Bank of India temporarily lifts select deposit rate restrictions for small finance banks until September 30 2026
The Reserve Bank of India has temporarily withdrawn select deposit rate restrictions for small finance banks. The change applies to fresh NRE deposits of three years and above and fresh FCNR(B) deposits of three years to five years, including renewals on maturity, from June 17, 2026 until September 30, 2026. Transfers from NRO to NRE accounts are excluded.