| Why in News | RBI raised interest rate ceilings on FCNR(B) deposits to attract foreign inflows. |
| Effective Period | Valid until March 31, 2025. |
| Revised Ceiling (1-3 years) | ARR + 400 bps (previously ARR + 250 bps). |
| Revised Ceiling (3-5 years) | ARR + 500 bps (previously ARR + 350 bps). |
| FCNR(B) Definition | Fixed deposit in freely convertible foreign currency for NRIs, tenure of 1-5 years. |
| FCNR(B) Outstanding Amount | $31.08 billion as of September 2024. |
| Inflow Data (April-September 2024) | $5.34 billion compared to $1.92 billion in the same period last year. |
| Purpose of FCNR(B) | Protects funds from currency fluctuations, provides funding options for banks. |
| Alternative Reference Rate (ARR) | Used as a benchmark for setting interest rate ceilings on FCNR(B) deposits. |
| Static Information (RBI) | Headquarters: Mumbai; Governor: Shaktikanta Das (as of 2024). |
| Net FPI Inflows (2024-25) | $9.3 billion (April-December). |
| Key Initiatives by RBI | Alocation: Rs 1.6 lakh to Rs 2 lakh, introduction of MuleHunter for AI-based fraud Alocation: Rs 1.6 lakh to Rs 2 lakh, introduction of MuleHunter for AI-based fraud detection, and proposal of SORR benchmark. |
| Expert Views | Limited impact predicted due to cheaper global funding options. |
| Challenges | Competitive global rates and minimal impact expected from revised rates. |
