The Reserve Bank of India has amended its 2025 directions on deposit interest rates for rural co-operative banks to temporarily withdraw two limits for non-resident deposits. From June 17, 2026 until September 30, 2026, banks may offer rates without the usual restriction on fresh Non-Resident External deposits with tenors of three years and above, and without the usual ceiling on fresh Foreign Currency Non-Resident Bank deposits with tenors of three years to five years. The temporary relief also covers deposits renewed at maturity. Under the amended framework, the standing rule remains that interest on Non-Resident External and Non-Resident Ordinary deposits must not exceed the rate the bank offers on comparable domestic rupee term deposits. However, that restriction is suspended for fresh Non-Resident External deposits of three years and above during the stated period. Any transfer from a Non-Resident Ordinary account to a Non-Resident External account does not qualify for the exemption. For Foreign Currency Non-Resident Bank deposits, the usual ceiling structure continues to apply to one-year to less than three-year deposits, while the ceiling for fresh three-year to five-year deposits is temporarily withdrawn for the same period. The amendment took effect on the date of issue.
Reserve Bank of India2026-06-17
Reserve Bank of India temporarily lifts rate restrictions on longer tenor NRE and FCNR(B) deposits at rural co-operative banks until September 30, 2026
The Reserve Bank of India has temporarily removed rate restrictions for certain non-resident deposits at rural co-operative banks. Until September 30, 2026, the usual cap on fresh FCNR(B) deposits of three to five years and the usual rate restriction on fresh NRE deposits of three years and above, including renewals, will not apply. Transfers from NRO accounts to NRE accounts are excluded from the NRE exemption.