The Reserve Bank of India has unveiled the Third Amendment Directions for Urban Co-operative Banks, focusing on interest rates for deposits. This amendment includes the temporary removal of the interest rate ceiling on new FCNR(B) deposits.
RBI Introduces Third Amendment Directions for Urban Co-operative Banks
On August 25, 2026, the Reserve Bank of India (RBI) announced the Third Amendment Directions (RBI/2026-27/247) concerning interest rates on deposits for Urban Co-operative Banks.
This amendment comes as an update to the earlier Directions issued on November 28, 2025, and revised on June 17, 2026. It temporarily withdraws the ceiling on interest rates applicable to fresh FCNR(B) deposits.
The adjustment aims to align the interest rate framework with current economic realities, providing banks more flexibility in managing deposits and attracting foreign currency.
Legal practitioners in the banking sector should review these developments to optimize their clients' financial strategies and ensure compliance with evolving regulations.
Citations
- RBI/2026-27/247 Reserve Bank of India