Indian banks can now give loans against FCNR(B) deposits, while the RBI will help manage currency risk through forex swaps on the main amount. This step is aimed at attracting more dollars into India and may increase FCNR(B) interest rates to around 6–7.1%.
The RBI has also simplified rules for standby letters of credit and introduced a swap facility for foreign loans, making it easier and cheaper for businesses to handle dollar-related risks.
economictimes