The RBI has announced a policy change excluding eligible advances against FCNR(B) and NRE deposits from the Adjusted Net Bank Credit (ANBC) for priority sector lending. This change is effective immediately.
RBI Revises Priority Sector Lending Criteria
The Reserve Bank of India has officially excluded eligible advances against specified FCNR(B) and Non-Resident External (NRE) deposits from being considered as part of the Adjusted Net Bank Credit (ANBC) for the purpose of priority sector lending. This policy adjustment is effective immediately.
This exclusion aims to refine the classification of priority sector lending, ensuring that banks focus on genuine priority sector activities. By delineating these categories, the RBI is reinforcing the need for banks to direct lending towards significant sectors that promote economic development.
Financial institutions must now adjust their lending strategies to comply with this change, as advances against FCNR(B) and NRE deposits will no longer contribute to their priority sector lending targets. This reclassification may influence lending patterns, affecting the availability of credit in priority sectors.
Legal practitioners should prepare clients for the implications of this policy shift, including potential impacts on compliance and reporting obligations, alongside advising on alternative financing solutions that align with the revised framework.
Citations
- RBI Notice (2026) RBI