The RBI has allowed banks to use funds from foreign currency non-resident deposits as collateral against lending to related local residents.

The funds in the foreign currency non-resident (FCNR) can be used for foreign exchange needs or for working capital needs in rupees for exporters and corporates, the RBI said, a move that could help attract dollar inflows.

On Friday, the central bank had eased the interest rate ceiling on some FCNR deposits to boost foreign currency inflows, following a sharp fall in the rupee.

The rupee on Friday fell to 53.92 to the dollar -its lowest in 2012, and has lost almost 9 percent since March.