The Reserve Bank of India has issued the Third Amendment Directions for Small Finance Banks, specifically regarding interest rates on deposits. This amendment allows for the temporary suspension of the interest rate ceiling on new FCNR(B) deposits.
RBI Announces Third Amendment Directions for Small Finance Banks
On August 25, 2026, the Reserve Bank of India (RBI) unveiled the Third Amendment Directions (RBI/2026-27/244) for interest rates on deposits applicable to Small Finance Banks.
This amendment updates previous Directions issued on November 28, 2025, and revised on June 17, 2026, removing the interest rate ceiling for fresh FCNR(B) deposits for a specified period.
This policy change is designed to enhance the competitive positioning of Small Finance Banks in attracting deposits, especially foreign currency.
Legal practitioners should ensure that they are familiar with these amendments to provide accurate guidance to clients regarding compliance and deposit strategies.
Citations
- RBI/2026-27/244 Reserve Bank of India