RBI allows banks to offer higher interest rates to NRIs/PIOs to mobilise forex
Practice PYQs on this topic
500+ questions on Economy with explanations
📌 Summary:
-
RBI has temporarily withdrawn the interest-rate ceiling on fresh FCNR(B) deposits of 3–5 year tenors and the restriction on interest rates for NRE deposits of three years and above (including deposits renewed on maturity)
-
Effected via Amendment Directions issued on June 17, 2026, valid till September 30, 2026
-
Objective: enable banks to offer higher interest rates to NRIs/PIOs to mobilise foreign exchange and boost India's forex reserves
-
The move relaxes RBI's earlier 2025 direction on these deposit categories
🎯 UPSC Relevance: GS3 — mobilising external resources, forex-reserve management, and the RBI's role in exchange-rate/balance-of-payments stability.
📝 Prelims Facts:
-
FCNR(B) = Foreign Currency Non-Resident (Bank) deposit; NRE = Non-Resident External deposit
-
Relaxation window: up to September 30, 2026; tenors — FCNR(B) 3–5 years, NRE 3 years and above
-
Issued by RBI via "Amendment Directions" dated June 17, 2026
🔑 Key Term: FCNR(B) deposit — a foreign-currency-denominated term deposit held by NRIs with Indian banks, shielding the depositor from rupee exchange-rate risk.
UPSC Classification
See PYQs related to “Economy”
Every classification tag above links to actual UPSC questions asked on that topic — with answer, explanation and elimination logic. Only in the app.