The Reserve Bank of India has amended its 2025 deposit rate directions for Regional Rural Banks to temporarily remove two key pricing constraints on non-resident deposits. From the date of issue until September 30, 2026, Regional Rural Banks may offer unrestricted rates on fresh FCNR(B) deposits with tenors of three years to five years and on fresh NRE deposits with tenors of three years and above, including deposits renewed at maturity. The amendment leaves the underlying framework in place outside that temporary window. Interest rates on NRE and NRO deposits continue to be capped at the rates the bank offers on comparable domestic rupee term deposits, but the restriction is suspended for eligible fresh NRE deposits and renewals of three years and above. Any transfer from an NRO account to an NRE account does not qualify for that exemption. For FCNR(B) deposits, the directions continue to show a ceiling of the Overnight Alternative Reference Rate for the respective currency or swap plus 250 basis points for one year to less than three years, and plus 350 basis points for three years to five years, while the ceiling for fresh deposits and renewals in the three year to five year bucket is suspended until September 30, 2026.

Original source Back to tracker