No New Deposit Schemes for Non-residents
Mumbai: Reserve Bank of India has ruled out any new non-resident deposit scheme to attract dollars while the special dollar-raising facility under foreign currency non-resident (bank), or FCNR(B), scheme it offered in 2013 will start maturing from September.
There would be outflows of dollars and Governor Raghuram Rajan said RBI is prepared for it. The special scheme helped achieve a record $34 billion of dollar inflows between September and November 2013. “The good news is we are fully prepared for whatever exit takes place and we will monitor market conditions. We think, at this point, that we don’t anticipate volatility, but if there is, we will deal with it,” Rajan said.
He does not expect a substantial rollover as the favourable terms offered in September 2013 will cease to continue. “We anticipate that it will not be renewed because we are not going to offer the same favourable terms again. So, we are estimating a fairly low rollover rate on the FCNR,” Rajan said at the postpolicy media conference on Tuesday.
Thecentralbankhadcomeoutwithan extraordinary scheme for FCNR(B) deposits in September 2013 to attract foreign currency inflows to stabilise the value of the rupee, which had then touched a low of almost ₹ 69 to the dollar.
Rajan does not expect substantial rollover as the favourable terms offered in Sept 2013 will cease to continue