Higher interest rate cap may have muted impact on NRI capital flow

UNLIKELY TO TRIGGER MAJOR INFLUX

- PRIYANSH VERMA

The Reserve Bank of India's (RBI) move to keep higher interest rate caps on the foreign currency non-resident banks (FCNR-B) deposits till the end of the fiscal could have a sentimental impact on capital inflows from abroad via this route. However, it may not trigger much influx in the short term as the current dollar FCNR rates of banks are way below the current ceilings.