The Reserve Bank of India has issued the Reserve Bank of India (Interest Rate on Deposits) Amendment Directions, 2026 for Commercial Banks, Small Finance Banks, Regional Rural Banks, Local Area Banks, Urban Co-operative Banks, and Rural Co-operative Banks. The amendments, effective from June 17, 2026, temporarily relax the interest rate restrictions on certain non-resident deposits until September 30, 2026. Specifically, banks are permitted to offer interest rates on fresh NRE deposits with tenors of three years and above, including renewals on maturity, without being subject to the existing cap linked to comparable domestic term deposits. Similarly, the interest rate ceiling on fresh FCNR(B) deposits with tenors of three to five years, including renewed deposits, has been temporarily withdrawn. However, transfers from NRO accounts to NRE accounts are not eligible for this relaxation. The objective of the measure is to provide banks greater flexibility in mobilising foreign currency and NRI deposits during the specified period.
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