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Informist, Friday, Dec. 6, 2024

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."

Addressing a post-policy press conference, Das said the hike in the ceiling was a "facilitation that we have provided to attract more inflows and (provide) opportunity to NRIs to invest".  End

Reported by Pratiksha

Edited by Saji George Titus

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