RBI Cuts NRI Deposit Rate Relief at Co-op Banks to Aug 31
RBI has shortened the special interest-rate flexibility window for FCNR(B) and NRE deposits at Rural Co-operative Banks, now ending August 31, 2026 instead of September 30, 2026.
The new deadline by which Rural Co-operative Banks must revert to standard NRI deposit rate ceilings — one month earlier than the previously announced September 30, 2026 cutoff.
Key Takeaways
If you are an NRI with an FCNR(B) deposit (3–5 year tenor) or an NRE deposit (3 years and above) maturing at a Rural Co-operative Bank, check with your bank immediately — the window to open or renew at potentially higher rates under the relaxed ceiling closes August 31, 2026.
If your bank quoted you a rate based on the September 30, 2026 deadline and now cannot honour it post-August 31, ask for written clarification and retain all communication.
For any grievance about deposit rates or terms not being honoured correctly, file a complaint with your bank first, then escalate to the RBI Ombudsman via sachet.rbi.org.in.
RBI has shortened the special interest-rate flexibility window for FCNR(B) and NRE deposits at Rural Co-operative Banks, now ending August 31, 2026 instead of September 30, 2026.
Here's what happened: RBI has moved the end date of a temporary interest-rate relaxation on FCNR(B) and NRE deposits at Rural Co-operative Banks from September 30, 2026 to August 31, 2026, effective immediately.. The relaxation — originally granted from June 17, 2026 — had removed the interest rate ceiling on fresh FCNR(B) deposits of 3-to-5 year tenors and eased rate restrictions on NRE deposits of 3 years and above, including renewals at maturity.. From September 1, 2026 onwards, Rural Co-operative Banks must revert to the standard regulated interest rate ceilings on these deposit categories.. This amendment is issued under Section 35A read with Section 56 of the Banking Regulation Act, 1949, and comes into force with immediate effect as of August 25, 2026..
What you should do: If you are an NRI with an FCNR(B) deposit (3–5 year tenor) or an NRE deposit (3 years and above) maturing at a Rural Co-operative Bank, check with your bank immediately — the window to open or renew at potentially higher rates under the relaxed ceiling closes August 31, 2026.. If your bank quoted you a rate based on the September 30, 2026 deadline and now cannot honour it post-August 31, ask for written clarification and retain all communication.. For any grievance about deposit rates or terms not being honoured correctly, file a complaint with your bank first, then escalate to the RBI Ombudsman via sachet.rbi.org.in..
This rule applies specifically to NRI depositors — both resident and non-resident Indians holding FCNR(B) deposits of 3–5 year tenors or NRE deposits of 3 years and above — but only at Rural Co-operative Banks. Depositors at commercial banks, small finance banks, or other regulated lenders are not affected by this particular direction. If your deposit is up for renewal in late August or September 2026, the one-month compression of this window could affect the rate your Rural Co-operative Bank is permitted to offer you.
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- [1]“Reserve Bank of India (Rural Co-operative Banks – Interest Rate on Deposits) Second Amendment Directions, 2026” NOTIFICATIONS FROM RBI · 28 Aug 2026
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