RBI clarifies rules on FCNR(B) deposits, loans
Synopsis Indian banks can now offer loans to non-residents and issue standby letters of credit against FCNR(B) deposits under a new RBI swap facility. The
Synopsis Indian banks can now offer loans to non-residents and issue standby letters of credit against FCNR(B) deposits under a new RBI swap facility. The central bank clarified that this swap covers only the principal amount of eligible deposits, not interest. This move aims to boost foreign currency inflows by allowing banks to swap eligible FCNR(B) deposits, ECBs, and overseas borrowings with the RBI at a favorable rate.
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