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RBI Eases CRR Norms For Some Deposits

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The Reserve Bank of India said on Wednesday banks can exempt some foreign currency non-resident bank (FCNRB) deposits and non-resident external (NRE) rupee deposits when calculating their cash reserve and statutory liquidity ratios.
 
The RBI said in a statement that starting from the bi-weekly cycle starting on 24 August, incremental three-year foreign FCNRB and NRE deposits with reference base dates of 26 July and above will be exempted from the cash reserve and statutory liquidity ratios. The cash reserve ratio is the proportion of cash deposits banks have to keep with the central bank in cash and the statutory liquidity ratio is the proportion that lenders must buy into government securities.
 
The RBI also said it raised interest rates on longer-term deposits accounts held by non-residents. On foreign currency non-resident bank (FCNRB) accounts with maturities of 3-5 years, the central bank said it raised the interest rate ceiling to LIBOR plus 400 basis points from LIBOR plus 300. The RBI removed the ceiling on interest rates on non-resident external rupee deposits with maturities of three years and above.
 
(Reuters) 


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