Consider the follwoing statements about the Foreign Currency Non-Resident (Bank) or FCNR(B) Deposit Scheme 2026: 1. FCNR(B) deposits allow NRIs to place fixed-term deposits in foreign currencies while remaining insulated from exchange-rate fluctuations. 2. There is no requirement of Priority Sector Lending (PSL) for the banks for the advances generated against these deposits. Which of the statements given above is/are correct? |ForumIAS

Q. Consider the follwoing statements about the Foreign Currency Non-Resident (Bank) or FCNR(B) Deposit Scheme 2026:
1.FCNR(B) deposits allow NRIs to place fixed-term deposits in foreign currencies while remaining insulated from exchange-rate fluctuations.
2.There is no requirement of Priority Sector Lending (PSL) for the banks for the advances generated against these deposits.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: C

Notes:

Explanation: Both

Statement 1 is correct: FCNR(B) deposits allow NRIs to place fixed-term deposits in foreign currencies while remaining insulated from exchange-rate fluctuations.

Statement 2 is correct: Under the current scheme, banks are permitted regulatory concessions, including exemptions from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements on eligible deposits. Also, there is no requirement of Priority Sector Lending (PSL) for the advances generated against these deposits.

Source: BL

Post-Mains Strategy Session by Mr. Ayush Sinha | ForumIAS