Under the scheme, the RBI provided subvention covering approximately 3.5% of the cost. Banks consequently offered non-resident Indians (NRIs) dollar deposit rates of around 6.5%. After accounting for the leverage extended by banks, the effective gross cost of the deposits to the financial system is estimated at approximately 11%
FCNR(B) Deposits May Cost $5.7 bn Yearly; Negative Carry Likely
By Deccan Chronicle • Published recently
Source: Deccan Chronicle