The RBI's Third Amendment Directions focus on interest rates for deposits with small finance banks, providing greater flexibility in their offerings.
RBI Releases Third Amendment Directions for Small Finance Banks
On August 25, 2026, the Reserve Bank of India issued the 'RBI (Small Finance Banks – Interest Rate on Deposits) Third Amendment Directions, 2026,' which updates previously established guidelines from 2025. This amendment allows small finance banks to temporarily withdraw interest rate ceilings on new FCNR(B) deposits.
This regulatory change is designed to foster competitive interest rates, thereby drawing in more deposits and improving liquidity in small finance banks. This shift is significant, especially in the context of the growing popularity of small finance banks in providing tailored banking services.
Practitioners should closely monitor these developments, as the implications of enhanced interest rate offerings could lead to changes in deposit strategies and consumer behavior in the financial landscape.
Citations
- Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Third Amendment Directions (2026)