FCNR(B) Deposit Rate Ceiling Raised to LIBOR/Swap + 100 bps
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2008-09/288 · issued 17 Nov 2008 · ~1 min read
Quick answerRBI has raised the interest rate ceiling on FCNR(B) deposits from LIBOR/SWAP plus 25 bps to plus 100 bps, effective November 15, 2008. This applies to all maturities and includes floating rate deposits with a six-month reset period.
What changed
The ceiling rate for FCNR(B) deposits of all maturities was increased from LIBOR/SWAP rates plus 25 basis points to plus 100 basis points, effective from close of business on November 15, 2008. For floating rate deposits, the ceiling is now SWAP rates plus 100 bps, with a 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 move aims to boost foreign currency inflows amid prevailing market conditions. Lenders should update their deposit pricing models and systems to reflect the new ceiling.
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 100 bps for all maturities effective November 15, 2008.
Ensure floating rate deposits use SWAP rates plus 100 bps with a six-month reset period.
Communicate revised rates to branches and treasury teams immediately.
Review and amend existing deposit contracts to comply with the new directive.
📜 Read the original circular — full text as issued by RBI
RBI/2008-09/288
RPCD.CO.RF.BC.No.66/ 07.38.01/2008-09
November 17, 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.50/07.38.01/2008-09 dated October 15, 2008 on Interest Rate on FCNR(B) Deposits. In view of prevailing market conditions, it has been decided that until further notice and with effect from close of business in India as on November 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 November 15, 2008, interest shall be paid within the ceiling rate of LIBOR / SWAP rates plus 100 basis points for the respective currency / corresponding maturities (as against LIBOR / SWAP rates plus 25 basis points effective from close of business on October 15, 2008). On floating rate deposits, interest shall be paid within the ceiling of SWAP rates for the respective currency / maturity plus 100 basis points. For floating rate deposits, the interest reset period shall be six months.
2. An amending Directive RPCD.CO.RF.BC.Dir.No.65/07.38.01/2008-09 dated November 17, 2008 is enclosed.
Yours faithfully,
(G. Srinivasan)
Chief General Manager-in-Charge
RPCD.CO.RF.BC. Dir.No.65/07.38.01/2008-09
November 17, 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 November 15, 2008, interest shall be paid within the ceiling rate of LIBOR / SWAP rates plus 100 basis points for the respective currency / corresponding maturities (as against LIBOR / SWAP rates plus 25 basis points effective from close of business on October 15, 2008). On floating rate deposits, interest shall be paid within the ceiling of SWAP rates for the respective currency / maturity plus 100 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/2008-09/288 · issued 17 Nov 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=4650&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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