To attract more dollars into the domestic market, bankers have requested the Reserve Bank of India to cut the minimum period of investment in Foreign Currency Non Resident (FCNR) and Non Resident External (NRE) account to six months from one year now.
FCNR deposits, which have a minimum tenure of one year and a maximum of five, can be opened by overseas Indians with banks in India.
NRE deposits are also opened with banks in India by non-resident Indians who can convert their dollar investments into rupee at the time of investment.
“We have requested that if the minimum investment period on FCNR and NRE deposits can be reduced to at least six months, it will help us bring some more dollars into the country,” said K.R. Kamath, Chairman and Managing Director, Punjab National Bank.
In the first two months of the current fiscal, FCNR(B) deposits in the banking system nudged up by just $207 million to $15.395 billion as at May-end 2013. FCNR deposits can be opened in US dollar, euro, British pound sterling, Canadian dollar. Australian dollar, Japanese yen, Swiss franc, New Zealand dollar, Danish krone, and Swedish krona.