RBI eases bank PSL calculation for loans backed by non-resident deposits | Finance News
In a move to offer regulatory relief to commercial banks, the Reserve Bank of India (RBI) on Friday allowed lenders to exclude advances backed by fresh non-resident deposits from the calculation of adjusted net bank credit (ANBC) — the benchmark used to determine priority sector lending (PSL) targets.
The RBI said advances against fresh Foreign Currency Non-Resident (Bank), or FCNR(B), deposits with a minimum tenure of three years and a maximum tenure of five years, mobilised by banks between 8 June 2026 and 30 September 2026, would be excluded from their ANBC calculation. This includes deposits renewed upon maturity.
Similarly, advances against non-resident external (NRE) term deposits with a tenure of three years or more, mobilised by banks between 19 June 2026 and 30 September 2026, would also be excluded from the ANBC calculation. This includes deposits renewed upon maturity.
In June, the central bank introduced a US dollar-rupee swap facility for fresh FCNR(B) dollar funds mobilised for a minimum tenure of three years and a maximum tenure of five years to incentivise capital inflows and strengthen the country’s balance-of-payments position.
“The amount to be excluded from ANBC for computation of priority sector targets shall not exceed the fresh FCNR (B) / NRE deposits eligible for exemption from maintenance of CRR / SLR in terms of the above Amendment Directions,” the RBI said.
Bankers said the step would reduce the overall PSL compliance burden for banks actively tapping non-resident capital during the specified window.
By granting this relief on PSL calculations, the banking regulator has effectively decoupled these specific advances backed by non-resident deposits from mandatory priority-sector obligations, which typically require commercial banks to deploy 40 per cent of their ANBC towards designated sectors such as agriculture, micro-enterprises and weaker sections.
