The Reserve Bank of India has amended its 2025 deposit rate directions for local area banks to temporarily remove two pricing constraints for non-resident deposits. Effective from the date of issue until September 30, 2026, local area banks may offer rates on fresh NRE deposits with tenors of three years and above without the usual restriction that they not exceed rates on comparable domestic rupee term deposits, and may also disregard the interest rate ceiling on fresh FCNR(B) deposits with tenors of three years to five years. The temporary relief also applies to deposits renewed on maturity. For NRE deposits, the exemption is limited to fresh mobilization and renewals for tenors of three years and above, while transfers from NRO accounts to NRE accounts do not qualify. For FCNR(B) deposits, the relaxation applies only to the three years to five years bucket. The existing ceiling for FCNR(B) deposits of one year to less than three years remains Overnight Alternative Reference Rate or swap plus 250 basis points.
Reserve Bank of India2026-06-17
Reserve Bank of India temporarily lifts interest rate restrictions on certain NRE and FCNR(B) deposits at local area banks until September 30 2026
The Reserve Bank of India has temporarily withdrawn interest rate restrictions for local area banks on fresh NRE deposits of three years and above and on fresh FCNR(B) deposits of three years to five years. The measure took effect immediately and runs until September 30, 2026, including for deposits renewed on maturity. Transfers from NRO accounts to NRE accounts are excluded from the NRE exemption.