The Reserve Bank of India has amended directions pertaining to Cash Reserve Ratio and Statutory Liquidity Ratio for Regional Rural Banks, introducing a US Dollar-Rupee swap facility for Foreign Currency Non-Resident deposits. This amendment aims to enhance liquidity management for the banks involved.
RBI Introduces US Dollar-Rupee Swap Facility
On June 8, 2026, the Reserve Bank of India issued the (Regional Rural Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Second Amendment Directions, 2026. This amendment follows the Governor's statement on June 5, 2026, regarding the introduction of a US Dollar-Rupee swap facility specifically for fresh Foreign Currency Non-Resident (Bank) [FCNR (B)] dollar funds. The facility is designated for funds mobilised with a minimum tenor of three years and a maximum tenor of five years.
The move aims to provide enhanced liquidity options for Regional Rural Banks, allowing them to better manage foreign currency risks associated with FCNR (B) deposits. The amendment will likely support rural financial stability and promote economic growth.
For practitioners in the banking and financial sector, this amendment is significant as it alters liquidity management practices within regional rural banking institutions. Legal advisors should communicate these changes to affected clients and assist in their compliance with the updated regulations.
Citations
- RBI/2026-27/106 (2026) RBI Notification
