No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2008-09/294 · issued 17 Nov 2008 · ~2 min read
Quick answerRBI raised the interest rate ceiling on FCNR(B) deposits for AD Category-I UCBs from LIBOR/SWAP plus 25 bps to plus 100 bps, effective November 15, 2008. This allows UCBs to offer higher rates on these foreign currency deposits to attract inflows amid market conditions.
What changed
The ceiling rate on 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 reset period. This supersedes the earlier directive dated October 15, 2008.
What it means for you
UCBs can now offer significantly higher interest rates on FCNR(B) deposits, making them more competitive against other instruments. This move aims to attract foreign currency deposits and improve dollar liquidity for UCBs. The wider spread also gives UCBs more flexibility to price deposits based on market conditions.
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 product rates to reflect the new ceiling of LIBOR/SWAP plus 100 bps for all maturities.
Ensure floating rate deposits have a six-month interest reset period as mandated.
Communicate the revised rates to branches and customers to leverage the higher ceiling for deposit mobilization.
Acknowledge receipt of this circular to your respective Regional Office.
Who it affects
AD Category-I Urban Co-operative Banks (UCBs), FCNR(B) deposit customers of these UCBs, Treasury and deposit operations teams at UCBs
❓ Common questions
Regulatory timeline
Stated effective dateeffective November 15, 2008
Decoded by BankPulse2026-06-19 11:35 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 100 basis points for the respective currency and maturity, effective from November 15, 2008.
Does this apply to floating rate FCNR(B) deposits?
Yes, floating rate deposits also have a ceiling of SWAP rates plus 100 bps, with a mandatory six-month interest reset period.
When did this change take effect?
It took effect from the close of business in India on November 15, 2008, and remains until further notice.
📜 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/2008-09/294
UBD BPD. AD Cir No. 26 /13.01.000/2008-09
November 17, 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.23 /13.01.000/2008-09 dated October 16, 2008 on the captioned subject.
2. In view of the 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 the 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 / maturities plus 100 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,
(Sathyan David)
General Manager
UBD.No.Dir 9 /13.01.000/2008-09
November 15, 2008
Interest Rates on FCNR (B) Deposits
In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949, and in modification of the directive UBD.No.Dir 5/13.03.00/2008-09 dated October 15, 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 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 the 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 / maturities 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/2008-09/294 · 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=4656&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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