RBI increases the ceiling interest rates on Foreign Currency Non-Resident (FCNR(B)) deposits

Reserve Bank of India (RBI) has announced an increase in the ceiling interest rates on Foreign Currency Non-Resident (FCNR(B)) deposits. This move is part of an ongoing effort to make such deposits more attractive to foreign investors and NRIs (Non-Resident Indians) by offering better returns. The new ceiling rates apply to fresh FCNR(B) deposits raised by banks, with a revised structure that allows higher interest rate margins over the Overnight Alternative Reference Rate (ARR) for respective currencies.

With the latest regulatory update, the ceiling interest rates for FCNR(B) deposits will be significantly higher, offering more attractive returns to NRIs and foreign investors.

1. For deposits with a tenure of 1 year to less than 3 years, the new ceiling has been set at the Overnight ARR of the respective currency, plus 400 basis points (4%).
2. For deposits with a tenure of 3 years and up to and including 5 years, the new ceiling is Overnight ARR plus 500 basis points (5%).

The relaxation in the ceiling rates is set to remain in effect until March 31, 2025.