RBI issued near-identical amendment directions on August 25, 2026, across six bank categories — Commercial Banks, Small Finance Banks, Local Area Banks, Regional Rural Banks, Urban Co-operative Banks, and Rural Co-operative Banks (Second Amendment for the last one; Third Amendment for the other five). These amend each category's respective "Interest Rate on Deposits" Directions, 2025. The underlying relief being amended: temporary withdrawal of the interest rate ceiling on fresh FCNR(B) deposits (3–5-year tenors) and restriction on interest rates on NRE deposits (3+ year tenors, including renewals), effective June 17, 2026, originally valid till September 30, 2026.
The amendment shortens this relaxation window, changing the end-date from September 30, 2026 to August 31, 2026, effective immediately. Mechanically, each notification amends two specific paragraphs in the respective Directions (paragraph numbers vary slightly by category) to reflect the revised date. Legal basis: Section 35A for Commercial Banks/SFBs/LABs/RRBs; Section 35A read with Section 56 for Urban and Rural Co-operative Banks. Net effect: banks across all these categories must revert to normal FCNR(B)/NRE interest rate ceilings a month earlier than originally scheduled.
