Home › Circulars › RBI/2005-06/298

Uniform Reference Rate for NRE/FCNR(B) Deposits via FEDAI-Published LIBOR/SWAP

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2005-06/298 · issued 08 Feb 2006 · ~2 min read

Quick answerRBI directs FEDAI to quote/display LIBOR/SWAP rates for NRE/FCNR(B) deposits from Feb 2006, ending bank-by-bank rate variations. Banks must use FEDAI's displayed rates to compute deposit ceilings uniformly.

What changed

Previously, banks used different methods and sources for LIBOR/SWAP rates, causing wide variation in NRE/FCNR(B) deposit rates. Now, FEDAI will quote and display the reference rates on the last working day of each month via a webpage accessible to Reuters screen subscribers. Banks must use these FEDAI-published rates to compute interest ceilings from the following month.

What it means for you

This move standardizes the base rate for NRE (1-3 year) and FCNR(B) (1-5 year) deposits, eliminating competitive distortions. Banks lose flexibility to cherry-pick LIBOR sources, but gain a transparent, uniform benchmark. Expect reduced rate wars among banks for non-resident deposits, and clearer pricing for depositors.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Ensure your institution is a Reuters screen subscriber to access FEDAI's webpage for the official LIBOR/SWAP rates from last working day of Feb 2006.
Update your NRE/FCNR(B) deposit rate-setting systems to use FEDAI's published rates as the sole reference.
Train your treasury and retail teams on the new uniform calculation method before March 2006.
Review and align your existing NRI deposit product documentation with the new FEDAI-based rate mechanism.

Who it affects

All commercial banks (excluding RRBs) offering NRE deposits, All commercial banks (excluding RRBs) offering FCNR(B) deposits, Treasury departments managing NRI deposit pricing, Non-resident depositors seeking consistent rates across banks

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-19 19:13 IST
Status change: withdrawn 10 Jul 2026, 04:02 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What currencies and maturities does FEDAI cover?

FEDAI will publish rates for six currencies (USD, GBP, EUR, CAD, AUD, JPY) across five maturities for NRE (1-3 years) and FCNR(B) (1-5 years) deposits.

When does the new FEDAI rate system take effect?

The first FEDAI rates will be published for the last working day of February 2006, and banks must use them for deposits effective from March 2006.

Does this change any other NRI deposit rules?

No. All other terms and conditions for NRE and FCNR(B) deposits remain unchanged as per the existing master circulars.

📜 Read the original circular — full text as issued by RBI

RBI/2005-06/298 

 DBOD. No. Dir.BC. 62/13.03.00/ 2005-06 

 February 8, 2006 

 All Commercial Banks

 (excluding RRBs) 

 Dear Sir, 

 Interest Rates on Non-Resident Deposits 

 Please refer to our Master Circulars DBOD. No. 
 Dir. BC. 5 & 6 / 13.03.00/ 2005-06 dated July 1, 2005 on Interest Rates 
 on Domestic and NRI Deposits. 

 2. In terms of our extant guidelines, interest 
 rates on NRE deposits of one to three years' maturity should not exceed the 
 LIBOR/ SWAP rates as on the last working day of the previous month for US dollar 
 of corresponding maturity plus 75 basis points. Similarly, rates of interest 
 on FCNR(B) deposits of one year and above should be within the ceiling rate 
 of LIBOR/ SWAP rates for the respective currency/ corresponding maturities minus 
 25 basis points. The maturity period of NRE deposits varies from 1 to 3 years 
 and that of FCNR(B) deposits from 1 to 5 years. Banks have been allowed to accept 
 FCNR(B) deposits denominated in US dollar, Pound Sterling, EURO, Canadian dollar, 
 Australian dollar and Japanese Yen. At present, LIBOR/ SWAP rates as on the 
 last working day of the month form the base for fixing ceiling rates for interest 
 on NRE/ FCNR(B) deposits that would be offered effective from the following 
 month. 

 3. Some of the banks have represented that in 
 the absence of any directions on how to set rates based on LIBOR/SWAP rates, 
 banks are using different 

 methods, sources and cut-off timings to decide 
 the interest rates on NRE/ FCNR(B) deposits, resulting in significant variation 
 in interest rates offered to non-resident depositors. The matter was examined 
 and it has been decided that in order to ensure uniformity and transparency 
 in interest rates on NRE/ FCNR(B) deposit, FEDAI would quote/ display the LIBOR/ 
 SWAP rates which will be used by banks in arriving at the interest rates on 
 NRI deposits. FEDAI will publish the deposit rates for five maturities in six 
 currencies on the last working day of each month using a web page that can be 
 accessed by all the subscribers to the Reuters screen. The first such rates 
 would be indicated by FEDAI for the last working day of February 2006. FEDAI 
 will shortly inform the relevant details in this regard. 

 4. All other terms and conditions applicable 
 to the NRI deposits remain unchanged. 

 Yours faithfully,

 (P. Vijaya Bhasker)

 Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/298 · issued 08 Feb 2006. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2735&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.