FCNR(B) Deposit Rate Ceiling Raised to LIBOR/SWAP + 25 bps
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2008-09/232 · issued 15 Oct 2008 · ~1 min read
Quick answerRBI has increased the interest rate ceiling on FCNR(B) deposits from LIBOR/SWAP minus 25 bps to plus 25 bps, effective October 15, 2008. This applies to all maturities and includes a six-month reset period for floating rate deposits.
What changed
The interest rate ceiling on FCNR(B) deposits of all maturities was revised from LIBOR/SWAP rates minus 25 basis points to LIBOR/SWAP rates plus 25 basis points, effective from the close of business on October 15, 2008. For floating rate deposits, the ceiling is now SWAP rates plus 25 basis points, with a mandatory six-month interest reset period.
What it means for you
Banks can now offer higher interest rates on FCNR(B) deposits, making them more attractive to non-resident depositors. This change reverses the previous reduction and may help banks mobilize foreign currency deposits amid market conditions. The six-month reset period for floating rate deposits ensures periodic rate adjustments aligned with market benchmarks.
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
Update FCNR(B) deposit interest rate ceilings to LIBOR/SWAP plus 25 bps for all new deposits from October 15, 2008.
Ensure floating rate FCNR(B) deposits have a six-month interest reset period as mandated.
Communicate the revised rate structure to branch operations and treasury teams immediately.
Review existing FCNR(B) deposit pricing strategies to remain competitive within the new ceiling.
Who it affects
Banks offering FCNR(B) deposit accounts, Non-resident depositors holding or opening FCNR(B) accounts, Treasury and ALM teams managing foreign currency liabilities
📜 Read the original circular — full text as issued by RBI
RBI/2008-09/232
RPCD.CO.RF.BC.No.50/ 07.38.01/2008-09
October 15, 2008
The Managing Director
Maharashtra State Co-operative Bank Ltd.
9, Nagindas Master Road Extension, Fort
Mumbai-1
Dear Sir,
Interest Rate on FCNR(B) Deposits
Please refer to our circular RPCD.CO.RF.BC.No.31/07.38.01/2008-09 dated September 17, 2008 on Interest Rate on FCNR(B) Deposits. On a review, it has been decided that until further notice and with effect from the close of business in India as on October 15, 2008, the interest rates on FCNR(B) Deposits will be as under:
In respect of FCNR(B) deposits of all maturities contracted effective from the close of business in India as on October 15, 2008, interest shall be paid within the ceiling rate of LIBOR / SWAP rates plus 25 basis points for the respective currency / corresponding maturities (as against LIBOR / SWAP rates minus 25 basis points effective from close of business on September 16, 2008). On floating rate deposits, interest shall be paid within the ceiling of SWAP rates for the respective currency / maturity plus 25 basis points. For floating rate deposits, the interest reset period shall be six months.
2. An amending Directive RPCD.CO.RF.BC.Dir.No.49/07.38.01/2008-09 dated October 15, 2008 is enclosed.
Yours faithfully,
(G. Srinivasan)
Chief General Manager-in-Charge
RPCD.CO.RF.BC. Dir.No.49/07.38.01/2008-09
October 15, 2008
Foreign Currency (Non-Resident) Accounts (Banks) Scheme
In exercise of the powers conferred by Section 35 A of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies), the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, hereby directs the following:
Interest rates applicable to deposits accepted under Foreign Currency Non-Resident Accounts (Banks) Scheme
In respect of FCNR(B) deposits of all maturities contracted effective from the close of business in India as on October 15, 2008, interest shall be paid within the ceiling rate of LIBOR / SWAP rates plus 25 basis points for the respective currency / corresponding maturities (as against LIBOR / SWAP rates minus 25 basis points effective from close of business on September 16, 2008). On floating rate deposits, interest shall be paid within the ceiling of SWAP rates for the respective currency / maturity plus 25 basis points. For floating rate deposits, the interest reset period shall be six months.
(Anand Sinha)
Executive Director
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/232 · issued 15 Oct 2008. 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=4552&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.
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