The Reserve Bank of India has issued amendment directions for urban co-operative banks that temporarily remove two deposit pricing constraints from June 17, 2026, through September 30, 2026. The change withdraws the interest rate restriction on fresh Non-Resident External deposits of three years and above, and the interest rate ceiling on fresh Foreign Currency Non-Resident Bank deposits with tenors of three years to five years, in both cases including deposits renewed at maturity. The amendments modify the 2025 directions on deposit rates. For NRE and Non-Resident Ordinary deposits, the standing rule remains that rates must not exceed those offered on comparable domestic rupee term deposits, but the restriction is suspended during the stated period for fresh NRE deposits of three years and above. Transfers from NRO accounts to NRE accounts do 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, but the ceiling for fresh FCNR(B) deposits in the three-year to five-year bucket is suspended during the same period.
Reserve Bank of India2026-06-17
Reserve Bank of India temporarily lifts Urban Co-operative Banks deposit rate caps on certain NRE and FCNR(B) tenors until September 30 2026
The Reserve Bank of India has amended its urban co-operative bank deposit rate directions to temporarily remove the cap on certain non-resident deposit rates until September 30, 2026. The relief covers fresh NRE deposits of three years and above and fresh FCNR(B) deposits of three years to five years, including renewals. Transfers from NRO accounts to NRE accounts are excluded from the NRE exemption.