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RBI Implements Third Amendment Directions for Small Finance Banks
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Reserve Bank of Indiabanking

RBI Implements Third Amendment Directions for Small Finance Banks

August 30, 2026

The RBI's Third Amendment Directions lifted the interest rate ceilings on small finance banks' deposits, aimed at enhancing the competitive landscape.

Small Finance Banks' Deposit Interest Rate Changes

On August 25, 2026, the RBI issued the Third Amendment Directions concerning the interest rate on deposits within Small Finance Banks. This release is part of the ongoing regulatory updates from November 2025.

Through these amendments, the Reserve Bank has temporarily lifted the interest rate ceilings for new deposits at Small Finance Banks. This measure is intended to support these banks in attracting more customers and resources, which is vital for their operations and lending capabilities.

With the removal of ceilings on interest rates for deposits, Small Finance Banks can adopt more aggressive strategies to secure depositors in a competitive financial environment.

Practitioners should consider the implications of this regulatory change on small finance banks' deposit strategies and how to effectively navigate potential shifts in depositor behavior.

Citations

  • RBI/2026-27/244 DOR.SOG(SPE).REC.212/13.03.00/2026-27
Practice Areas:banking

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