MUMBAI, Aug. 18 -- The Reserve Bank of India's decision to advance the closure of its foreign currency non-resident bank or FCNR (B) deposit window has surprised banks and market participants, especially because the governor recently said otherwise.

The abrupt change has raised concerns about policy predictability, with market participants suggesting that even a caveat from the central bank that the scheme could be reviewed depending on the pace of inflows would have helped banks and customers plan better.

The early closure came as a surprise to market participants and banks that had been arranging funding and leverage transactions based on the original timeline, three senior treasury officials said on condition of anonymity.

"It has c...