RBI revises criteria for RRBs to accept FCNR(B) Deposits

Mumbai, July 4 (UNI) With a view to make foreign exchange services to Non Resident Indians (NRIs) and Persons of Indian Origin (PIO), Reserve Bank today revised norms for RRBs for accepting Foreign Currency Non-Resident Scheme (banks) Deposits (FCNR(B)). The banking regulator has also revised the criteria for opening and maintaining Non Resident Ordinary (NRO) Current Account and Non Resident External (NRE) accounts.

As per the revised norms, RRBs can accept deposits in US Dollars, Pound Sterling, Euro, Japanese Yen, Australian Dollars and Canadian Dollars, subject to the terms and conditions as laid down by RBI.

''Since RRBs may not have well-developed treasuries to manage the foreign currency liability or risk, they may enter into suitable tie-up arrangements with their sponsor banks for necessary support and expertise in putting through the transactions regarding acceptance of FCNR (B) deposits,'' RBI said.

RRBs can approach the concerned Regional Office of the Foreign Exchange Department, for authorization for acceptance of FCNR (B) deposits.

RRBs would also be allowed to swap foreign currency funds, including accrued interest, with the sponsoring banks for broad basing their Rupee resources.

However, central bank has also said the entire exchange risk and maturity mismatch risk related with the FCNR(B) Deposits should be managed by the sponsor bank.

UNI