RBI Policy
Interest rate ceiling on 1-5 yr FCNR(B) deposit hiked by 150 bps
This story was originally published at 13:01 IST on 6 December 2024
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NEW DELHI – The Reserve Bank of India on Friday raised the interest rate ceilings on Foreign Currency Non-Resident Accounts (Banks) (FCNR[B]) deposits from 1 year to five years by 150 basis points. Announcing the December Monetary Policy Committee outcome, Governor Shaktikanta Das said the interest rate ceilings have been increased to attract more capital inflows.
Banks are now allowed to raise fresh FCNR(B) deposits between 1 year and less than 3 years at rates not exceeding the overnight alternative reference rate plus 400 bps compared with 250 bps earlier. For deposits of 3 to 5 years, the ceiling has been increased to the overnight alternative reference rate plus 500 bps against 350 bps earlier. This relaxation in FCNR(B) deposit rates will be available till March 31, Das said.
An FCNR(B) account is a specialised banking facility designed to cater to the financial requirements of Non-Resident Indians and Persons of Indian Origin. It is denominated in foreign currencies, providing account holders with the ability to save their overseas income in foreign currencies. End
Reported by Pratiksha
Edited by Saji George Titus
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