The Reserve Bank of India (RBI) has officially excluded advances against specified FCNR(B) and NRE deposits from the Adjusted Net Bank Credit (ANBC) calculations for priority sector lending targets. This change is effective immediately.
RBI Excludes FCNR(B) and NRE Advances from ANBC
The Reserve Bank of India (RBI) has announced the exclusion of advances against specified Foreign Currency Non-Resident (B) [FCNR(B)] and Non-Resident External (NRE) deposits from the Adjusted Net Bank Credit (ANBC) considerations for determining priority sector lending targets. This decision is effective immediately and positions the RBI towards a recalibration of priority sector definitions.
This revision hinges on the RBI’s aim to enhance the effectiveness of priority sector lending while ensuring that banks focus their resources on freshly mobilized deposits and economic activities generating employment. The regulatory change is part of a broader strategy to fortify financial stability and grant banks more flexibility in their lending operations.
Legally, the prerequisites for sector lending as determined under the Priority Sector Lending guidelines now shift slightly, directing how banks mobilize their resources. Practitioners in banking and finance must adjust their lending strategies to align with these changes, considering the implications for their lending portfolios in light of policy objectives.
Citations
- RBI Notification (2026) Volume 1 Page 23