Question

Evaluate the following statements about Foreign Currency Non-Resident (Bank) [FCNR(

Q: Answer-Evaluate the following statements about Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits and...

Statement I is correct. FCNRB deposits are maintained by NRIsPIOs in permitted foreign currencies. Key features deposits are in foreign currency not rupees both principal and interest are freely repatriable to the country of residence there is no exchange rate risk for the depositor since the deposit is maintained and repaid in the same foreign currency the bank, not the depositor, manages the currency exposure interest is earned in foreign currency and the deposits are available in 6 permitted currencies USD, GBP, EUR, JPY, AUD, CAD. Statement II is correct. The RBI issued six Amendment Directions dated June 17, 2026, temporarily removing the interest rate ceiling on fresh FCNRB deposits of 3 to 5 year tenors across all categories of banks commercial banks, SFBs, UCBs, cooperative banks, RRBs until September 30, 2026. This allows banks to offer market-competitive rates, incentivising NRI deposits and improving Indias foreign currency liquidity. Deposits renewed on maturity also benefit from the lifted cap.

B ] deposits and recent regulatory changes: I. FCNR(
B deposits are term deposits maintained by Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) in India in foreign currencies (such as USD, GBP, EUR, JPY, AUD, CA
B deposits with tenors of 3 to 5 years (effective June 17, 2026, until September 30, 2026), allowing banks to offer competitive market-linked rates to attract NRI foreign currency inflows a measure to strengthen India’s foreign exchange reserves during a period of global financial uncertainty. Which of the above is/are correct?
D both principal and interest are freely repatriable, and they carry no exchange risk for the depositor as the bank bears the currency risk. II. In June 2026, the RBI temporarily withdrew the interest rate ceiling on fresh FCNR(