**Summary:**
This policy directive, RBI20222382 DOR. SOG SPE.REC.No 5313.03.000202223, issued by the Reserve Bank of India (RBI) on July 06, 2022, modifies the regulations concerning interest rates on Foreign Currency Non-Resident (Bank) [FCNR(B)] and Non-Resident External (NRE) Rupee deposits.
Effective July 07, 2022, the interest rate ceiling on FCNR(B) deposits is temporarily withdrawn for incremental deposits mobilized by banks until October 31, 2022.
Similarly, the restriction stipulating that interest rates on NRE deposits should not exceed those offered on comparable domestic rupee term deposits is also temporarily withdrawn for incremental NRE deposits mobilized during the same period (July 07, 2022, to October 31, 2022). This relaxation does not apply to Ordinary Non-Resident (NRO) deposits.
These concessions are subject to review. All other existing instructions pertaining to these matters remain unchanged.
The issuing authority is Santosh Kumar Panigrahy, Chief General Manager, Reserve Bank of India.
Key Entities Referenced
Reserve Bank of India: The central bank of India, often referred to as RBI. The document is issued by RBI.
All Scheduled Commercial Banks: Refers to all commercial banks in India that are included in the Second Schedule to the Reserve Bank of India Act, 1934.
Regional Rural Banks: Refers to rural banks in India.
All Small Finance Banks: Refers to all small finance banks in India.
All Local Area Banks: Refers to all local area banks in India.
All Payment Banks: Refers to all payment banks in India.
All Primary Urban Cooperative Banks: Refers to all primary urban cooperative banks in India.
Foreign Currency Nonresident Accounts Banks Scheme: FCNR B deposits scheme.
NonResident External Rupee: NRE Deposit scheme.
Master Direction on Interest Rate on Deposits: Refers to the overarching guidelines issued by RBI regarding interest rates on deposits. Several versions of this direction are referenced.
Santosh Kumar Panigrahy: Chief General Manager at Reserve Bank of India.
RBI/2022-23/82
DOR. SOG (SPE).REC.No 53/13.03.000/2022-23 July 06, 2022
All Scheduled Commercial Banks (including Regional Rural Banks)
All Small Finance Banks
All Local Area Banks
All Payment Banks
All Primary (Urban) Co-operative Banks/ DCCBs /State Cooperative Banks
Dear Sir / Madam,
Master Direction on Interest Rate on Deposits - Foreign Currency (Non-resident)
Accounts (Banks) Scheme [FCNR(B)] and Non-Resident (External) Rupee (NRE)
Deposit
Please refer to the instructions regarding interest rates on FCNR (B) deposits contained
in Section 19 of the Master Direction (MD) on Interest Rate on Deposits dated March 03,
2016 and Section 18 of the Master Direction (MD) on Interest Rate on Deposits dated
May 12, 2016. In this connection, banks are advised that with effect from July 07, 2022,
the interest rate ceiling applicable to FCNR (B) deposits is being temporarily withdrawn
for incremental FCNR (B) deposits mobilized by banks for the period until October 31,
2022.
2. Further, in terms of Section 15 (d) and Section 14 (d) of the above-mentioned MDs
respectively, interest rates on NRE deposits shall not be higher than those offered by the
banks on comparable domestic rupee term deposits. In this regard, the said restriction
with respect to interest rates offered on incremental NRE deposits mobilized by banks
shall be temporarily withdrawn with effect from July 07, 2022, for the period until
October 31, 2022. The above relaxation shall not be applicable to Ordinary Non-Resident
(NRO) Deposits.3. These concessions will be subject to review.
4. All other instructions in this regard shall remain unchanged.
Yours faithfully,
(Santosh Kumar Panigrahy)
Chief General Manager
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