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CRR on FCNR(B): Switch to RBI Reference Rate from FEDAI Rate

Current · Source: Reserve Bank of India · RBI/2011-12/628 · issued 29 Jun 2012 · ~1 min read
Quick answerRBI replaces FEDAI indicative rates with its own Reference Rate for converting FCNR(B) deposits into rupee equivalents for CRR calculation, effective from the reporting fortnight beginning July 13, 2012.
The rule, in the simplest words
How it plays out — a real example

As a forex & trade-finance officer in Indore, I need to convert a foreign deposit into rupees to calculate the CRR. I will use the RBI Reference Rate published on the Reserve Bank's website at 12:30 pm instead of the FEDAI indicative rate at 12 noon. This ensures that our CRR calculation is accurate and in line with RBI's official exchange rate.

What changed

Earlier, banks used FEDAI indicative rates at 12 noon for four major currencies to compute rupee liability under FCNR(B) for CRR. Now, banks must use the RBI Reference Rate published on its website around 12:30 pm for converting foreign assets/deposits in Form A Return.

What it means for you

This aligns CRR computation with RBI's official exchange rate, reducing arbitrage between FEDAI and RBI rates. Banks need to update their systems to fetch the RBI Reference Rate instead of FEDAI rates for reporting. The change ensures uniformity in regulatory reporting across all scheduled commercial banks.

What you must do

Who it affects

All Scheduled Commercial Banks (excluding RRBs), Treasury departments handling FCNR(B) deposits, Compliance teams managing CRR reporting, IT teams responsible for regulatory reporting systems

❓ Common questions

Which rate replaces the FEDAI indicative rate for CRR on FCNR(B)?

The RBI Reference Rate announced on the RBI website at around 12:30 pm replaces the FEDAI indicative rate (previously at 12 noon) for converting foreign assets/deposits in Form A Return.

From when is this change effective?

The change is effective from the reporting fortnight ending July 13, 2012.

Does this apply to all currencies under FCNR(B)?

Yes, it applies to all four major currencies (US dollar, GBP, Japanese Yen, and Euro) as specified in the earlier circulars.

📜 Read the original circular — full text as issued by RBI
RBI/2011-12/628 DBOD. No. Ret.BC.113/12.01.001/2011-12 June 29, 2012 All Scheduled Commercial Banks (Excluding Regional Rural Banks) Dear Sir, Section 42 of the RBI Act, 1934 – Maintenance of CRR on Foreign Currency (Non-Resident) [FCNR (B)] Scheme Please refer to our circulars DBOD No. BC.39/12.01.001/95 dated April 05, 1995 and DBOD No. BC.50/12.01.001/2000-01 dated November 07, 2000 on the captioned subject, advising banks that in order to determine the rupee equivalent liability under FCNR (B) Scheme for the purpose of Cash Reserve Ratio (CRR), the FEDAI indicative rate for all the four major currencies (viz US dollar, GBP, Japanese Yen, and DM/Euro) on relevant reporting Friday which is available at 12.00 noon on any working day may be used. 2. In this connection, we advise that banks may be guided by the RBI Reference rate announced on the Reserve Bank’s web site at around 12:30 pm for the purpose of converting foreign assets/deposits for reporting in Form A Return (instead of indicative rates announced by FEDAI at 12 noon). The change may be brought into effect from the reporting fortnight ending July 13, 2012. Yours faithfully, Indrani Banerjee (General Manager)
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/628 · issued 29 Jun 2012. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Update your CRR calculation system to use RBI Reference Rate (published at ~12:30 pm) instead of FEDAI indicative rates for FCNR(B) deposits.
📜 Compliance
  • Ensure Form A Return for the fortnight ending July 13, 2012, reflects the new conversion method.
  • Train treasury and compliance teams on the revised rate source and timing.
  • Verify that all four major currencies (USD, GBP, JPY, EUR) are converted using the correct RBI Reference Rate.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (All Scheduled Commercial Banks (excluding RRBs), Treasury departments handling FCNR(B) deposits, Compliance teams managing CRR reporting, IT teams responsible for regulatory reporting systems), your first concrete step on “CRR on FCNR(B): Switch to RBI Reference Rate from FEDAI Rate” is: “Update your CRR calculation system to use RBI Reference Rate (published at ~12:30 pm) instead of FEDAI indicative rates for FCNR(B) deposits.” (RBI issued this 29 Jun 2012).

  1. Circular: RBI/2011-12/628 -- CRR on FCNR(B): Switch to RBI Reference Rate from FEDAI Rate
  2. Issued: 29 Jun 2012
  3. Action required: Update your CRR calculation system to use RBI Reference Rate (published at ~12:30 pm) instead of FEDAI indicative rates for FCNR(B) deposits.
  4. Action required: Ensure Form A Return for the fortnight ending July 13, 2012, reflects the new conversion method.
  5. Action required: Train treasury and compliance teams on the revised rate source and timing.
  6. Action required: Verify that all four major currencies (USD, GBP, JPY, EUR) are converted using the correct RBI Reference Rate.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7307&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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