The Reserve Bank of India (RBI) has increased the interest rate ceiling for foreign currency non-resident (FCNR-B) deposits in order to boost foreign exchange inflows amidst the ongoing depreciation of the Indian rupee.

This adjustment allows banks to offer more competitive rates on FCNR-B accounts, which are term deposits held in foreign currencies, thus protecting depositors from fluctuations in exchange rates.

According to the recent monetary policy statement by RBI Governor Shaktikanta Das, banks can now accept new FCNR-B deposits with maturities ranging from one year to less than three years at rates not exceeding the relevant reference rate plus 400 basis points.

This measure is part of the central bank's proactive approach to stabilizing the currency during periods of economic pressure, as previously seen in July 2013 and July 2022.