RBI Revises Temporary Interest Rate Relaxation Period for FCNR(B) and NRE Deposits – Effective Till August 31, 2026


Quick Summary
The Reserve Bank of India has amended the temporary relaxation period for interest rates on FCNR(B) and NRE deposits. Originally set to end on September 30, 2026, this relaxation, which applies to fresh FCNR(B) deposits of 3-5 year tenors and NRE deposits of 3 years and above, will now conclude on August 31, 2026. These changes are effective immediately.

August 25, 2026

Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Third Amendment Directions, 2026

Please refer to the Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Directions, 2025 (hereinafter referred to as ‘Directions’), dated November 28, 2025 (Updated as on June 17, 2026), wherein temporary withdrawal of the interest rate ceiling on fresh FCNR(B) deposits of 3-5 year tenors and restriction on interest rates on NRE deposits of 3 year and above tenors, including the deposits that are renewed upon maturity, have been provided with effect from June 17, 2026, for the period until September 30, 2026. On a review, it has been decided to amend the date ‘September 30, 2026’ to the date ‘August 31, 2026’ for the aforementioned temporary relaxation.

2. Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act,1949 and all other laws enabling the Reserve Bank India (RBI) in this regard, the RBI, being satisfied that it is necessary and expedient in public interest so to do, hereby, issues the Amendment Directions hereinafter specified.

3. These Amendment Directions shall be called the Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Third Amendment Directions, 2026.

4. These Amendment Directions shall come into force with immediate effect.

5. These Amendment Directions shall modify the Directions, as under:

In paragraph 26(4) subscript (1), the phrase “with effect from June 17, 2026, for the period until September 30, 2026” shall be substituted with “with effect from June 17, 2026, for the period until August 31, 2026”.

In paragraph 31(7) subscript (2), the phrase “with effect from June 17, 2026, for the period until September 30, 2026” shall be substituted with “with effect from June 17, 2026, for the period until August 31, 2026”.

(Dr. Sudarsana Sahoo)
Chief General Manager

FAQ :

The RBI has revised the end date for the temporary relaxation of interest rate ceilings on FCNR(B) and NRE deposits. The relaxation period will now end on August 31, 2026, instead of September 30, 2026.

This revision affects fresh FCNR(B) deposits with tenors of 3-5 years and NRE deposits with tenors of 3 years and above, including renewed deposits.

The temporary relaxation period began on June 17, 2026.

The new end date for the temporary interest rate relaxation is August 31, 2026.

These Amendment Directions come into force with immediate effect.

 

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