RBI measures to boost forex flows

Reserve Bank of India RBI on Wednesday further liberalised norms with an aim to boost inflow of foreign currency in the country. They have been exempted from the mandatory Cash Reserve Ratio CRR and Statutory Liquidity Ratio SLR on incremental foreign currency deposits.

Reserve Bank of India (RBI) on Wednesday further liberalised norms with an aim to boost inflow of foreign currency in the country. Following are the highlights: * Cap on paying interest rate on Foreign Currency Non-Resident Bank [FCNR(B)] and NRE deposits removed till October 31; this is likely to incentivise NRIs to park their surplus funds in Indian banks.

* Banks too have been incentivised to mobilise FCNR (B) and NRE deposits. They have been exempted from the mandatory Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) on incremental foreign currency deposits. * Announces measures to boost FPI investments in short-term debt securities while trying to attract hot money amid outflow of capital from the domestic market.

* Doubles fund limit under the automatic External Commercial Borrowing (ECB) route to USD 1.5 billion.

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