Reserve Bank of India (Local Area Banks- Cash Reserve Ratio and Statutory Liquidity Ratio) Amendment Directions, 2026

Under this notification, the Amendment Directions modify the Reserve Bank of India (Local Area Banks- Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025

The insertion of the words “other development financial institutions as defined in section 2 (cccii) of the RBI Act, 1934” under paragraph 16(1). Paragraph 16(1) recognised only specifically named DFIs (like NABARD, Exim Bank, etc.) for the purposes of CRR/SLR treatment. Any newly created or statutorily recognised DFI was not automatically covered unless expressly mentioned. Now, the scope is widened to include all “other DFIs” falling within the statutory definition under s. 2(cccii), RBI Act. This removes ambiguity and avoids repeated amendments every time a new DFI is created. All notified DFIs now fall within the CRR/SLR framework by operation of this direction.

The deletion of words ‘under “Cash in Hand”’ in paragraphs 23(5)(v) as per these amending directions also show that the scope of the provision is widened as now the treatment and classification is not restricted to ‘cash in hand’ which gives banks a greater flexibility in classification of eligible balances for compliance purposes.

In Annex I (Form A), the words “National Bank for Agriculture and Rural Development, Export Import Bank of India” shall be substituted with “the Exim Bank, the National Housing Bank, the National Bank, the Small Industries Bank, the National Bank for Financing Infrastructure and Development or the other development financial institution”. Earlier position was that Form A mentioned only two institutions that are, NABARD and Exim Bank explicitly. However now, it replaces this with a broader and updated list, including NHB, SIDBI, NaBFID and “other DFIs”. The implication here is that these specified banks are legally required to include exposures/deposits with all recognised DFIs which ensures a wider disclosure mechanism.

The words “Export-Import Bank of India and National Bank for Agriculture and Rural Development” shall be substituted with “Exim Bank, National Bank, National Housing Bank, Small Industries Bank, National Bank for Financing Infrastructure and Development and other development financial institutions as defined in section 2 (cccii) of the Reserve Bank of India Act, 1934”. The inclusion of these DFIs have broadened the interpretation of the provision which ensures consistency with the parent statute.

The word “specified” shall be substituted with “notified” and words “time to time” will be deleted which points towards the recognition of only the amendments which are rightly notified by the government instead of internal procedural interpretations of the same.

Insertion of new item “Amount deposited with the Reserve Bank, under Standing Deposit Facility (SDF) Scheme” formally integrates the SDF into the liquidity reporting ecosystem, reflecting RBI’s post-LAF framework.