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FE Rules2007Rate of Return on Foreign Currency Deposits Raised Under FE-25 of 1998

RATE OF RETURN ON FOREIGN CURRENCY DEPOSITS RAISED UNDER FE-25 OF 1998

EPD Circular Letter No. / 10 May 21, 2007


Attention of Authorized Dealers is invited to Paragraph 6(ii), Chapter VI, FEM-2002, in terms of which Authorized Dealers are free to decide the rate of return offered on such FE-25 deposits provided the maximum rate of return does not exceed LIBOR applicable on the date of determination of such return/profit.

It is clarified that in terms of Prudential Regulation for Corporate/Commercial Banking No. O-5, banks have been allowed to freely decide the rate of return on deposits mobilized under FE-25 without placing any cap. Accordingly, the Paragraph 6(ii), Chapter VI, FEM-2002 may be read amended as below:

\"(ii) Authorized Dealers are free to decide the rate of return offered on such deposits\"

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