The RBI has updated its directives to exempt long-term NRE deposits from CRR and SLR requirements for Small Finance Banks, enhancing liquidity management.
Exemption for Small Finance Banks on Long-Term NRE Deposits
The Reserve Bank of India has amended its 2025 Directions to exempt long-term Non-Resident External (NRE) term deposits from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) for Small Finance Banks. This update aims to improve liquidity management practices across the sector.
Specifics of the Amendment
This exemption applies to eligible fresh NRE deposits and takes effect immediately. It also includes updates to the reporting requirements, specifically Form A, ensuring that banks can efficiently manage their liquidity while remaining compliant.
Banking practitioners should be vigilant about these adjustments as they can significantly influence Small Finance Banks' operational frameworks and liquidity strategies.
