RBI exempts fresh FCNR(B), NRE advances from priority sector targets

The Reserve Bank of India on August 7 issued fresh directions excluding advances against certain foreign currency and non-resident deposits from the calculation of Adjusted Net Bank Credit (ANBC) for priority sector lending targets. The move follows measures announced in June to attract dollar inflows through a swap facility and exemptions from cash reserve ratio (CRR) and statutory liquidity ratio (SLR) requirements.

Under the new rules, advances against fresh FCNR(B) deposits of three to five years mobilised between June 8 and September 30, 2026, and against NRE term deposits of three years or more raised between June 19 and September 30, 2026, will not count toward ANBC. Banks that mobilise such deposits will not need to meet priority sector lending obligations on the corresponding advances. The amendment takes effect immediately.