The Reserve Bank of India (RBI) has asked banks to report data on FCNR (B) deposits, external commercial borrowings and overseas foreign currency borrowings daily, it said in a notification on Friday.

On June 8, the RBI launched the swap facility for FCNR (B) deposits and ECBs. It would absorb the full hedging cost on incremental FCNR(B) deposits and partial hedging cost for ECBs, as part of a broader package of measures aimed at attracting foreign currency inflows and supporting the rupee.

The data from June 8 till issuance of these directions, shall be submitted along with the first reporting due on June 22, the RBI said. 

In a separate notification, the RBI also exempted non-resident (external) rupee term deposits of three years or more tenure from the cash reserve ratio and statutory liquidity ratio requirements, the central bank said in a notification on Friday. The exemption will be valid till September 30. 

“The exemption on reserves maintenance is available for the original deposit amounts until the deposits are held in the bank books. Any transfer from non-resident (Ordinary) (NRO) accounts to NRE accounts will not qualify for such exemptions,” the regulator said. 

“This gives banks greater flexibility to offer more competitive rates and attract higher NRI inflows. Since NRE deposits are fully repatriable and interest income is tax exempt in India, the enhanced rates make them an attractive savings avenue for NRIs. However, unlike FCNR(B) deposits, NRE deposits are denominated in rupees and expose depositors to exchange rate risk. For banks, the measure can help mobilise stable NRI liabilities, strengthen liquidity and support long term balance sheet management,” said V R C Reddy, treasury head, Karur Vysya Bank. 

He added that CRR exemption alone gives banks leeway of around 20 bps that can be passed on depositors. “Higher rates induce more deposits into the banking system through inward remittance.” 

On Wednesday, the RBI temporarily withdrew interest rate ceiling on interest rates on NRE deposits and FCNR(B) deposits of three years and above tenors. Earlier this month, the RBI removed reserve requirements for FCNR(B) deposits.