RBI Circular for July 2026

July 6, 2026July 6, 2026 admin 0 Comments banking regulation, circulars, compliance, FINANCIAL INSTITUTIONS, India, rbi

Review of Circulars issued under Foreign Exchange Management Act, 1999 (FEMA)

June 24, 2026

1. In pursuance of the Reserve Bank’s ongoing initiative to rationalise the regulatory framework under the Foreign Exchange Management Act, 1999 (FEMA), a review of circulars issued since June 01, 2000, has been undertaken. The circulars, as listed at Annex, that have ceased to be operative owing to subsequent regulatory amendments, redundancy, overlap or supersession by newer directives, are being withdrawn.

2. Authorised Persons may bring the contents of this circular to the notice of their constituents concerned.

3. The directions contained in this circular have been isued under Section 10(4) and Section 11(1) of the FEMA, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Modification of Returns / Reporting requirements under FEMA, 1999

June 24, 2026

1. Attention of Authorised Persons is invited to the provisions contained in the Foreign Exchange Management (Authorised Persons) Regulations, 2026, Master Direction – Money Changing Activities, Master Direction – Money Transfer Service Scheme (MTSS), and Master Direction – Reporting under Foreign Exchange Management Act, 1999, as amended from time to time.

2. On a review, it has been decided to rationalise certain reporting requirements, and prescribe/modify reporting formats pursuant to the Foreign Exchange Management (Authorised Persons) Regulations, 2026.

3. The formats for submission of various returns are provided in the Annex to this circular. The following additional instructions shall apply:

i) The revised format of FLM-8 shall also capture details relating to write-off of foreign currency notes. The requirement of obtaining prior approval of the Reserve Bank for write-off of foreign currency notes exceeding USD 2000 has been discontinued. Entities maintaining Nostro accounts and reporting the relevant transactions through FETERS shall not submit FLM-8 returns.

ii) Authorised Persons having franchisee arrangements shall submit a list of such arrangements within 15 days from the end of each calendar quarter.

iii) Indian Agents under MTSS shall submit the list of Sub-Agents on a quarterly basis within 15 days from the end of each calendar quarter.

4. The following instructions / returns / forms stand discontinued:

i) Prescribed formats of registers FLM-1 to FLM-7 under the Master Direction – Reporting under FEMA. However, FFMCs and non-bank AD Category-II entities shall continue to maintain complete and accurate records of all foreign exchange transactions undertaken by them and shall make such records available to the Reserve Bank for inspection/supervisory purposes, as and when required.

ii) Return titled “Quarterly Statement showing summation of Foreign Currency Account opened in India out of export proceeds of Foreign Currency Notes / encashed Travellers’ Cheques.”

iii) Requirement for submission of separate List of Additional Locations under MTSS and the requirement of quarterly confirmation regarding the veracity of the list published on the Reserve Bank’s website.

iv) Return relating to Statement of Collateral under MTSS. Indian Agents shall, however, continue to ensure adequacy of collateral in terms of extant instructions.

5. Master Direction – Money Changing Activities and Master Direction – Reporting under FEMA are being updated separately to reflect the above changes.

6. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Reserve Bank of India (Regional Rural Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Third Amendment Directions, 2026

June 19, 2026

1. Please refer to the Reserve Bank of India (Regional Rural Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025 (Updated as on June 8, 2026). On review, it has been decided that fresh Non-Resident (External) Rupee (NRE) term deposits of tenor of three years or more mobilized (including deposits that are renewed upon maturity) by the banks from the date of this Amendment Directions till September 30, 2026 will be exempted from maintenance of CRR and SLR.

2. Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 and pursuant to Section 42 of the Reserve Bank of India Act, 1934 and Sections 18 and 24 of Banking Regulation Act, 1949, as amended from time to time, and all other provisions / laws enabling the Reserve Bank of India in this regard, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Amendment Directions hereinafter specified.

3. These Directions shall be called the Reserve Bank of India (Regional Rural Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Third Amendment Directions, 2026.

4. The provisions shall come into force with immediate effect.

5. These Amendment Directions modify the Reserve Bank of India (Regional Rural Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025 as under:

i. In paragraph 20, the following sub-paragraph shall be inserted “6. Fresh Non-Resident (External) Rupee (NRE) term deposits of tenor of three years or more mobilized (including deposits that are renewed upon maturity) by the banks between June 19, 2026 and September 30, 2026 are exempt from maintenance of CRR from the reporting fortnight beginning July 16, 2026 (i.e., based on the NDTL computation as on June 30, 2026) and subsequent fortnights thereafter. The exemption on reserves maintenance is available for the original deposit amounts till such time the deposits are held in the bank books. Any transfer from Non-Resident (Ordinary) (NRO) accounts to NRE accounts will not qualify for such exemptions”.

ii. In paragraph 28(5), the words ‘paragraphs 20 (3), (4) and (5)’ shall be substituted with ‘paragraphs 20 (3), (4), (5) and (6)’.

iii. In item VIII of the Annex A to Form A,