The Hindu Business Line : Four banks raise NRE deposit rates

This follows the Reserve Bank of India's move to liberalise the interest rate ceiling for NRE deposits in the annual monetary policy statement announced on April 18.

Bank of Baroda, Bank of India, Union Bank of India, and ICICI Bank, have raised the interest rates on NRE term deposits by over 25 basis points, with immediate effect.

Bank of India has increased rates by 30 basis points from six per cent to 6.3 per cent.

The bank has increased the rate on deposits of maturities of minimum one year to maximum seven years.

Union Bank of India and ICICI Bank have raised the rates to 6.3 per cent, while Bank of Baroda has increased the rates by 25 basis points.

With the focus on deposit mobilisation, this is one of the tools available with banks to raise funds, said a bank official.

Welcome move

Welcoming the RBI move, a senior bank official said: "NRI deposits had been quite tardy last year. Hopefully the situation will be better this year."

Last month, the RBI had also allowed banks to increase the ceiling on FCNR deposits up to LIBOR or SWAP rate as against the earlier ceiling of LIBOR minus 25 basis points, to improve liquidity.

In the monetary policy, the RBI had increased the ceiling interest rates on NRE deposits for 1-3 years' maturity by 25 basis points to 100 basis points above LIBOR/SWAP rates for the US dollar.

Our Thiruvananthapuram Bureau reports: State Bank of Travancore (SBT) has raised interest rates on NRE term deposits with effect from today.

Announcing this, an SBT spokesman said that the rates have been raised to 6.30 per cent from six per cent a year for deposits of one to five years.

The core banking platform has enabled the bank to introduce a facility whereby remittances made through the Saudi Arabia-based Al Rajhi Banking and Investing Corp for credit of account holders of SBT are credited directly to the respective accounts.

More Stories on : Fixed Deposits | NRIs | Interest Rates

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