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RBI / 2005-06 / 340
DBOD.No.Dir.BC. 75 / 13.03.00 / 2005-06
March 29, 2006
All Scheduled Commercial Banks
(excluding RRBs)
Dear Sir,
Interest Rate on FCNR(B) Deposits
Please refer to item (a) of Annexure I to our
Master Circular DBOD.No.Dir.BC.
6 / 13.03.00 / 2005-06 dated July 1, 2005 and the Circular No. DBOD.No.Dir.BC.
62 / 13.03.00 / 2005-06 dated February 8, 2006. In terms of the above guidelines,
banks are free to accept FCNR(B) deposits denominated in US dollar, Pound Sterling,
EURO, Canadian dollar, Australian dollar and Japanese Yen for maturity period
of 1-5 years and pay interest within the ceiling rate of LIBOR / SWAP rates
for the respective currency / corresponding maturities minus 25 basis points.
On floating rate deposits, interest should 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 would be six months.
2. The matter has been reviewed and it has been
decided that in respect of FCNR(B) deposits of all maturities contracted effective
close of business in India on March 28, 2006, interest shall be paid within
the ceiling rate of LIBOR / SWAP rates for the respective currency / corresponding
maturities. On floating rate deposits, interest shall be paid within the ceiling
of SWAP rates for the respective currency / maturity. For floating rate deposits,
the interest reset period shall be six months.
3. An amending Directive DBOD.No.Dir.BC.74/13.03.00/2005-06 dated
March 29, 2006 is enclosed.
Yours faithfully,
(P.Vijaya Bhaskar)
Chief General Manager
DBOD.No.Dir.BC. 74/13.03.00/2005-06
March 29, 2006
Foreign Currency (Non-Resident) Accounts (Banks)
Scheme
In exercise of the powers conferred by Section
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 Annexure I to the Bank’s Master Circular DBOD.No.Dir.BC. 6
/ 13.03.00 / 2005-06 dated July 1, 2005 shall be substituted by the following
:
Interest rates applicable to deposits accepted
under Foreign Currency Non-Resident Accounts (Banks) Scheme
(a) In respect of FCNR(B) deposits of all
maturities contracted effective close of business in India on March 28, 2006,
interest shall be paid within the ceiling rate of LIBOR / SWAP rates for the
respective currency / corresponding maturities. On floating rate deposits, interest
shall be paid within the ceiling of SWAP rates for the respective currency /
maturity. For floating rate deposits, the interest reset period shall be six
months.
2. The other provisions of the above Master
Circular, as amended from time to time, shall remain unchanged.
(Anand Sinha)
Executive Director
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