The Reserve Bank of India (RBI), on August 25, 2026, issued the Reserve Bank of India (Local Area Banks – Interest Rate on Deposits) Third Amendment Directions, 2026, reducing the validity period of the temporary relaxation relating to interest rates on certain FCNR(B) and NRE deposits.
The temporary withdrawal of the interest rate ceiling on fresh FCNR(B) deposits of 3–5 year tenors and the specified relaxation concerning NRE deposits of 3 years and above, including deposits renewed upon maturity, was originally applicable from June 17, 2026 until September 30, 2026. The RBI has now shortened this period to August 31, 2026.
The amendment is effective immediately and modifies paragraphs 26(4)(1) and 31(7)(2) of the RBI’s Local Area Banks – Interest Rate on Deposits Directions, 2025, replacing the reference to September 30, 2026 with August 31, 2026.
[RBI/2026-27/245; DOR.SOG(SPE).REC.215/13.03.00/2026-27]
