RBI Temporarily Lifts Interest Rate Caps on FCNR(B) and NRE Deposits
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2022-23/82 · issued 06 Jul 2022 · ~2 min read
Quick answerFrom July 7 to October 31, 2022, RBI has temporarily removed interest rate ceilings on incremental FCNR(B) deposits and the restriction linking NRE deposit rates to domestic rupee term deposits. This allows banks to offer higher rates to attract fresh non-resident deposits.
What changed
RBI has temporarily withdrawn the interest rate ceiling on incremental FCNR(B) deposits for the period July 7 to October 31, 2022. Additionally, the restriction that NRE deposit rates cannot exceed comparable domestic rupee term deposit rates has been temporarily lifted for incremental NRE deposits during the same period. These relaxations do not apply to NRO deposits.
What it means for you
Banks can now offer more competitive rates on fresh FCNR(B) and NRE deposits to attract foreign currency inflows and non-resident rupee deposits. This flexibility helps banks manage liquidity and funding costs, especially in a rising rate environment. The temporary nature means banks should plan their deposit mobilization strategies within this window.
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
Review and adjust interest rates on incremental FCNR(B) and NRE deposits to optimize inflows within the relaxation period.
Ensure compliance that the relaxation applies only to incremental deposits, not existing ones, and does not extend to NRO deposits.
Monitor market conditions and competitor rates to set attractive yet sustainable deposit rates.
Prepare for a possible review or withdrawal of the relaxation after October 31, 2022.
Who it affects
All Scheduled Commercial Banks including Regional Rural Banks, Small Finance Banks, Local Area Banks, Payment Banks, Primary (Urban) Co-operative Banks, District Central Co-operative Banks, State Co-operative Banks
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-18 05:54 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Does this relaxation apply to all FCNR(B) and NRE deposits or only new ones?
The relaxation applies only to incremental deposits mobilized during the period July 7 to October 31, 2022. Existing deposits are not affected.
Are NRO deposits also covered under this relaxation?
No, the relaxation explicitly does not apply to Ordinary Non-Resident (NRO) deposits.
What happens after October 31, 2022?
The concessions are temporary and subject to review. Banks should be prepared for the previous interest rate restrictions to be reinstated unless RBI extends or modifies the relaxation.
📜 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)
RBI’s words: “Official withdrawal register entry #228: DOR.SOG(SPE).REC.No.53/13.03.000/2022-23 — "Master Direction on Interest Rate on Deposits - Foreign Currency (Non-resident) Accounts (Banks) Scheme [FCNR(B)] a”
📜 Read the original circular — full text as issued by RBI
RBI/2022-23/82
DOR.SOG (SPE).REC.No 53/13.03.000/2022-23
July 06, 2022
All Scheduled Commercial Banks (including Regional Rural Banks)
All Small Finance Banks
All Local Area Banks
All Payment Banks
All Primary (Urban) Co-operative Banks/ DCCBs /State Cooperative Banks
Dear Sir / Madam,
Master Direction on Interest Rate on Deposits - Foreign Currency (Non-resident) Accounts (Banks) Scheme [FCNR(B)] and Non-Resident (External) Rupee (NRE) Deposit
Please refer to the instructions regarding interest rates on FCNR (B) deposits contained in Section 19 of the Master Direction (MD) on Interest Rate on Deposits dated March 03, 2016 and Section 18 of the Master Direction (MD) on Interest Rate on Deposits dated May 12, 2016 . In this connection, banks are advised that with effect from July 07, 2022, the interest rate ceiling applicable to FCNR (B) deposits is being temporarily withdrawn for incremental FCNR (B) deposits mobilized by banks for the period until October 31, 2022.
2. Further, in terms of Section 15 (d) and Section 14 (d) of the above-mentioned MDs respectively, interest rates on NRE deposits shall not be higher than those offered by the banks on comparable domestic rupee term deposits. In this regard, the said restriction with respect to interest rates offered on incremental NRE deposits mobilized by banks shall be temporarily withdrawn with effect from July 07, 2022, for the period until October 31, 2022. The above relaxation shall not be applicable to Ordinary Non-Resident (NRO) Deposits.
3. These concessions will be subject to review.
4. All other instructions in this regard shall remain unchanged.
Yours faithfully,
(Santosh Kumar Panigrahy)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2022-23/82 · issued 06 Jul 2022. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 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=12350&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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