The Reserve Bank of India (RBI) on August 07, 2026, issued the Reserve Bank of India (Priority Sector Lending – Targets and Classification) Second Amendment Directions, 2026, aligning PSL norms with recent liquidity measures introduced for FCNR(B) and NRE deposits. This follows earlier announcements regarding the US Dollar–Rupee swap facility for FCNR(B) deposits and exemptions from CRR and SLR for specified non-resident deposits mobilised during defined timelines.
The amendment provides that advances extended in India against fresh FCNR(B) deposits (with tenure of 3–5 years) mobilised between June 08, 2026 and September 30, 2026, and advances against NRE term deposits (3 years or more) mobilised between June 19, 2026 and September 30, 2026, shall be excluded from the calculation of Adjusted Net Bank Credit (ANBC). This exclusion is subject to the condition that such deposits qualify for CRR and SLR exemptions as per earlier RBI directions.
Further, the Directions modify Paragraph 6.1 of the PSL Master Directions by updating Item VI to incorporate these exclusions, while also capping the exclusion amount to the level of eligible FCNR(B)/NRE deposits. Additionally, the earlier methodology related to incremental advances (Footnote 3) has been removed to simplify computation.
These amendments are effective immediately and are expected to incentivise banks to mobilise foreign currency and NRE deposits by providing regulatory relief, while ensuring that PSL targets are computed on a more accurate credit base.
[Notification No. RBI/2026-27/232 FIDD.CO.PSD.BC.No.08/04.09.001/2026-27]
