Reserve Bank of India (Priority Sector Lending – Targets and Classification) Third Amendment Directions, 2026
The RBI issued its Third Amendment Directions for Priority Sector Lending (PSL), modifying rules concerning the exclusion of certain advances from Adjusted Net Bank Credit (ANBC). Specifically, the end date for exempting advances against fresh FCNR(B) and NRE term deposits has been revised from September 30, 2026, to August 31, 2026. This amendment clarifies that these exclusions are tied to deposits qualifying for CRR and SLR exemptions, impacting how banks calculate their PSL targets and ANBC.
What this means
This adjustment means banks have a shorter window for certain FCNR(B) and NRE deposit-backed advances to be excluded from ANBC for PSL calculation. Banks must recalibrate their PSL strategies and ANBC calculations to reflect this earlier cutoff, which could slightly increase their effective PSL requirement depending on their portfolio mix.
Most affected: PSL compliance, ANBC calculation, FCNR(B) utilization
Key takeaway: Review and adjust PSL compliance calculations, noting the updated end date for FCNR(B) and NRE deposit-backed advance exclusions from ANBC.
Get stories like this in your inbox every morning
Free daily brief — rates, RBI updates and the banking stories that matter, in 3 minutes.
More in this briefing
- RBI to drain Rs 1 lakh crore as VRRR auctions fail to absorb liquidity
- RBI issues draft SOP for temporary debit holds on money-mule, cyber fraud accounts
- Bank deposits grow 17.8% in August, fastest in decade as FCNR-B inflows mask local mobilisation woes
- SBI’s ERD expects 25 bps repo rate hike each in Oct and Dec due to hardening crude oil prices, CPI inflation
- SBI developing solution to use UPI data for checking creditworthiness of small biz