The Reserve Bank of India has announced new amendments to the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) for Small Finance Banks to enhance liquidity frameworks.
RBI Issues Amendments for Small Finance Banks on CRR and SLR
The Reserve Bank of India (RBI) has published the "Small Finance Banks – Cash Reserve Ratio and Statutory Liquidity Ratio" Third Amendment Directions on June 19, 2026. These amendments are designed to improve liquidity provisions for Small Finance Banks.
The updates refine the existing norms relating to CRR and SLR, stipulating the conditions under which NRE term deposits can be considered, thereby enhancing the liquidity capacity of these banks.
This regulatory framework aims to ensure that Small Finance Banks maintain adequate levels of liquidity to support their lending obligations and mitigate financial risks.
The RBI’s revisions aim to bolster the financial stability of Small Finance Banks through proactive liquidity management.
For legal practitioners, these changes necessitate a thorough understanding of revisions in liquidity norms, especially for advising clients in the banking and finance sectors on compliance with the new regulatory landscape.
Citations
- RBI/2026-27/146 (2026)
