RBI lifts NRE and FCNR(B) interest caps to attract funds
The Reserve Bank of India (RBI) just made it easier for banks to offer better returns to nonresident Indians (NRIs) by removing interest rate limits on certain foreign currency and NRE deposits.
This move, effective immediately until September 30, 2026, is all about attracting more overseas money and shoring up India's foreign exchange reserves.
Banks can offer higher NRI rates
Before this, banks had strict caps on how much interest they could pay for FCNR(B) deposits of more than three years and up to five years and NRE deposits of three years and above.
The limits were temporarily relaxed until September 30, 2026, so banks can offer higher rates to NRIs.
Transfers from regular NRO accounts do not get these perks.
The RBI hopes this flexibility will help bring in more foreign funds and keep India's finances steady during global ups and downs.