Attention
of Authorized Dealers is invited to Paragraph 6(ii), Chapter
VI, FEM-2002, in terms of which Authorized Dealers are
free to decide the rate of return offered on such FE-25
deposits provided the maximum rate of return does not
exceed LIBOR applicable on the date of determination of
such return/profit.
It
is clarified that in terms of Prudential Regulation for
Corporate/Commercial Banking No. O-5, banks have been
allowed to freely decide the rate of return on deposits
mobilized under FE-25 without placing any cap. Accordingly,
the Paragraph 6(ii), Chapter VI, FEM-2002 may be read
amended as below:
“(ii)
Authorized Dealers are free to decide the rate of return
offered on such deposits”