No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2008-09/238 · issued 19 Sep 2008 · ~2 min read
Quick answerRBI has raised the FCNR(B) deposit interest rate ceiling for AD Category-I UCBs from LIBOR/SWAP minus 25 bps to plus 25 bps, effective October 15, 2008. This allows UCBs to offer higher rates on these foreign currency deposits.
What changed
The ceiling rate for 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 close of business on October 15, 2008. For floating rate deposits, the ceiling is now SWAP rates plus 25 bps with a six-month reset period.
What it means for you
UCBs can now offer more competitive rates on FCNR(B) deposits, potentially attracting more foreign currency inflows. This gives banks greater flexibility in pricing these deposits, but they must stay within the new ceiling. The change reverses the earlier reduction, signaling a shift in RBI's stance to support deposit mobilization.
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 slabs to reflect the new ceiling of LIBOR/SWAP plus 25 bps for all maturities.
Ensure floating rate deposits use SWAP rates plus 25 bps as the ceiling with a six-month reset period.
Communicate the revised rates to branch managers and treasury teams for immediate implementation.
Acknowledge receipt of this circular to your respective Regional Office.
Who it affects
AD Category-I Urban Co-operative Banks (UCBs), Treasury departments of UCBs, Depositors holding or considering FCNR(B) accounts
❓ Common questions
Regulatory timeline
Stated effective dateeffective October 15, 2008
Decoded by BankPulse2026-06-19 11:59 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn05 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the new interest rate ceiling for FCNR(B) deposits?
The ceiling is LIBOR or SWAP rates plus 25 basis points for the respective currency and maturity, effective from October 15, 2008.
Does this apply to floating rate FCNR(B) deposits?
Yes, for floating rate deposits, the ceiling is SWAP rates plus 25 bps, with interest reset every six months.
When did the previous ceiling of minus 25 bps apply?
The earlier ceiling of LIBOR/SWAP minus 25 bps was effective from close of business on September 16, 2008, until this revision.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
📜 Read the original circular — full text as issued by RBI
RBI/2008-09/238
UBD BPD. AD Cir No. 23 /13.01.000/2008-09
October 16 , 2008
Chief Executive Officer of
All AD Category-I UCBs
Dear Sir/Madam,
Interest Rate on FCNR (B) Deposits- UCBs (ADs)
Please refer to UBD BPD. AD Cir No.17 /13.01.000/2008-09 dated September 19, 2008 on the captioned subject.
2. On a review, it has been decided that until further notice and with effect from 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 rates 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.
3. A Directive to this effect is enclosed. All other terms and conditions applicable to FCNR (B) deposits remain unchanged.
4. Please acknowledge receipt to our Regional Office concerned.
Yours faithfully,
(A. K. Khound)
Chief General Manager in-Charge
UBD.No.Dir.5/13.01.000/2008-09
October 15, 2008
Interest Rate on FCNR (B) Deposits
In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) and in modification of the directive UBD.No.Dir.2 /13.01.000/2008-09 dated September 16, 2008 on Interest Rates on FCNR (B) deposits, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby directs that Interest Rates on FCNR (B) deposits shall 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 the 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."
(V.S Das)
Executive Director
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/238 · issued 19 Sep 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=4549&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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