The RBI has issued Fourth Amendment Directions for urban co-operative banks concerning CRR and SLR, providing exemptions to enhance liquidity. This decision is expected to positively impact the banking operations of these institutions.
RBI Releases Fourth Amendment Directions for Urban Co-operative Banks' CRR and SLR
On August 25, 2026, the Reserve Bank of India introduced the Fourth Amendment Directions regarding the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) for urban co-operative banks. This amendment provides exemptions for maintaining these ratios for specified new deposits including FCNR(B) deposits.
This amendment builds on prior Directives established on November 28, 2025, and updated in June 2026. The changes are aimed at alleviating liquidity constraints faced by urban co-operative banks and increasing their operational efficiency.
By easing the CRR and SLR requirements, the RBI is allowing urban co-operative banks the flexibility to utilize their resources more effectively, which can lead to enhanced services for customers.
“These exemptions are critical for urban co-operative banks to strengthen their financial position and community support,” noted an RBI representative.
Legal practitioners must take note of this amendment as it can influence regulatory compliance obligations and the financial strategies of urban co-operative banks, which may be significant for their clients.
Citations
- Reserve Bank of India (Urban Co-operative Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions (2026) RBI/2026-27/241