The Reserve Bank of India (RBI) has provided regulatory support to commercial banks by allowing the exclusion of loans secured by new non-resident deposits from the calculation of Adjusted Net Bank Credit (ANBC). This metric is used to determine the targets for lending to priority sectors (PSL).
The RBI clarified that loans issued against new Foreign Currency Non-Resident (Bank) or FCNR(B) deposits attracted during specific periods will not be included in the ANBC calculation. This applies to deposits with a minimum tenure of three years and a maximum tenure of five years, attracted by banks between June 8, 2026, and September 30, 2026. Deposits extended after maturity are also included in this exclusion.
A similar exclusion applies to loans against Non-Resident External (NRE) term deposits with a tenure of at least three years, attracted by banks between June 19, 2026, and September 30, 2026, including extended deposits.
Previously, in June, the central bank introduced a US dollar and rupee swap mechanism for new FCNR(B) dollars with tenures ranging from three to five years to stimulate capital inflow and strengthen the country's balance of payments.
The RBI emphasized that the amount that can be excluded from ANBC when calculating priority sector targets must not exceed the amount of new FCNR(B) / NRE deposits eligible for exemption from maintaining CRR / SLR under the aforementioned Amendment Directions.
Banks noted that this decision will reduce the overall compliance burden for PSL requirements for institutions actively attracting non-resident capital within the specified periods. By providing this relief in PSL calculations, the banking regulator has effectively separated these specific loans secured by non-resident deposits from the priority sector obligations, which typically require commercial banks to direct 40 percent of their ANBC towards areas such as agriculture, micro-enterprises, and vulnerable populations.
