UPSC Prelims Practice Questions — RBI allows banks to offer higher interest to NRIs/PIOs

Q1. The June 2026 directive permitting banks to offer higher interest rates to NRIs/PIOs on fresh FCNR(B) and NRE deposits was issued by which one of the following authorities?

  • A. Ministry of Finance, Government of India
  • B. Reserve Bank of India under the Banking Regulation Act, 1949 and RBI Act, 1934
  • C. Securities and Exchange Board of India
  • D. Foreign Exchange Dealers' Association of India (FEDAI)

Q2. In the context of RBI's regulations on non-resident deposits, the term 'FCNR(B)' account refers to which one of the following?

  • A. A Foreign Currency Non-Resident (Bank) account in which the deposit is held in a designated foreign currency by an NRI/PIO with a scheduled bank in India
  • B. A Foreign Capital Non-Resident (Bonds) account used by NRIs to subscribe to sovereign bonds issued abroad
  • C. A Foreign Currency Non-Resident (Banking) account in which deposits are held in Indian rupees but interest is paid in foreign currency
  • D. A Foreign Custody Non-Repatriable (Bank) account permitting limited repatriation of principal but not of interest