Mumbai, Aug. 7 -- In a fresh incentive for banks to attract foreign currency deposits from overseas Indians, the Reserve Bank of India (RBI) on Friday exempted rupee loans against fresh and renewed foreign currency non-resident (FCNR-B) deposits of three to five years mobilized between 8 June and 30 September from their adjusted net bank credit (ANBC) calculations.

Adjusted net bank credit is net credit plus investments made by banks in certain bonds, and is used as a base for priority sector lending targets. This implies they are free to use these funds for loans without setting anything aside for the mandated priority sector targets.

Loans against non-resident external (NRE) term deposits, maintained in rupees by non-resident Indians ...