The RBI has announced the Fourth Amendment Directions for rural co-operative banks concerning Cash Reserve Ratio and Statutory Liquidity Ratio, exempting certain new deposits. This change aims to enhance liquidity within these institutions.
RBI Introduces Fourth Amendment Directions for Rural Co-operative Banks' CRR and SLR
On August 25, 2026, the Reserve Bank of India released the Fourth Amendment Directions regarding the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) for rural co-operative banks. This amendment provides exemptions for maintaining these ratios concerning specific new deposits, particularly FCNR(B) deposits.
This follows the RBI's earlier Directions set on November 28, 2025, updated in June 2026. The current changes are expected to significantly ease the liquidity pressures experienced by rural co-operative banks and allow them additional capital for lending and development purposes.
The directive aims to bolster financial health by providing rural co-operative banks with the essential flexibility needed to attract and retain liquidity while meeting regulatory obligations.
“Exemptions from CRR and SLR for new deposits will greatly support rural co-operative banks in their financial operations,” said an RBI official.
For legal professionals, understanding the implications of these amendments will be vital, especially for clients engaged in the operations of rural banks and those advising on compliance with financial regulations.
Citations
- Reserve Bank of India (Rural Co-operative Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions (2026) RBI/2026-27/242