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Interest Rate on FCNR (B) Deposits
DBOD
No. Dir. BC. 31 - 13.03.00 dated 8th October 2002
Please
refer to our circular DBOD No. Dir. BC. 98/ 13.03.00/01-02 dated 29 April 2002
advising therein that in respect of FCNR (B) deposits for a maturity of 1-3
years, banks may offer fixed and floating rates of interest within the ceiling
rate of LIBOR/ SWAPS rates for the respective currency/ corresponding maturities
minus 25 basis points. In the context of difficulties experienced by banks in
charging of interest at 25 basis points lower than LIBOR on Yen deposits, the
matter has been reviewed by us and it has been decided that in respect of Yen
deposits, banks may have the freedom to set the FCNR (B) deposit rates which may
be equal or less than LIBOR. The other provisions of our above directive remain
unchanged.
2.
An amending Directive DBOD No. Dir. BC. 30/ 13.03.00/02-03 dated October
8, 2002 is enclosed.
3.
Please acknowledge receipt.
Reserve
Bank of India
Central
Office
Department
of Banking Operations and Development
Centre
- 1, World Trade Centre
Cuffe
Parade, Colaba, Mumbai - 400 005
FOREIGN
CURRENCY (NON-RESIDENT) ACCOUNTS (BANKS) SCHEME
DBOD
No. Dir. BC. 30 - 13. 03.00 - dated 8th October 2002
In
exercise of the powers conferred by Sections 21 and 35A of the Banking
Regulation Act, 1949, the Reserve Bank of India being satisfied that it is
necessary and expedient in the public interest so to do, hereby directs that
item (a) of Bank�s Directive DBOD No. Dir. BC. 97/13.03.00/2001-02 dated April
29, 2002 shall be substituted by the following:
Interest
rates applicable to deposits accepted under Foreign Currency Non-Resident
Accounts (Banks) Scheme
(a)
In respect of deposits of one year and above, interest shall be paid
within the ceiling rate of LIBOR/ SWAP rates for the respective currency/
corresponding maturities minus 25 basis points. On floating rate deposits,
interest shall be paid within the ceiling of SWAP rates for the respective
currency/maturity minus 25 basis points. For floating rate deposits, the
interest-reset period shall be six months. However, in respect of Yen deposits,
banks have the freedom to set the FCNR (B) deposit rates, which may be equal or
less than LIBOR.
2.
The other provisions of the Master Directive DBOD No. Dir. BC.
09/13.03.00/ 01-02 dated 11 August 2001 shall remain unchanged.
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