The Hindu Business Line : NRE, FCNR deposits look attractive for customers

Non-resident external (NRE) and foreign currency non-resident (FCNR) deposits may soon look attractive for customers with the banks hiking rates on these deposits.

The RBI in a move to discourage dollar inflows into the economy had reduced the ceiling interest rate on FCNR deposits by 50 basis points to LIBOR minus 75 basis points RBI in its Annual Credit Policy on April 25.

The ceiling interest rate on NRE deposits were also reduced by 50 basis points to LIBOR or SWAP rates. However, with the rise in the LIBOR rates by almost eight basis points in the past one-two months, banks have been forced to increase NRE and FCNR deposit rates.

The RBI’s ceiling on these deposits stay unchanged. But certainly these deposits will get attractive for customers again, said a senior public sector bank official.

State Bank of India, Bank of India and Union Bank of India among others have hiked their NRE and FCNR deposits.

In the case of FCNR (B) deposits, the above mentioned banks have hiked the interest rate on dollar deposits to 4.68 per cent from 4.57 per cent for a tenure of one-to-less than two years and for two-to-less than three years it is 4.68 per cent (4.57 per cent).

The interest rates on NRE deposits have also been hiked to 5.43 per cent from the earlier 5.39 per cent for one-to-less than two years and to 5.43 per cent from 5.32 per cent in two-to-less than three years. India saw inflows of $3,895 million from NRI deposits during 2006-07 against $2,789 million, the previous year, according to the latest Balance of Payments data from RBI.

More Stories on : Fixed Deposits | NRIs | Interest Rates

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Financial inclusion alone is not enough

Less for more: Textile export value to US down even as volumes surge

Rupee gains 9 paise

Magma Shrachi giving Rs 373 cr

Nabard mulls arm for micro-finance

Bond prices strengthen

Andhra Bank aims at lending Rs 500 cr for education

Gitanjali, ICICI Bank tie up for jewellery credit card

Banks lower bulk deposit rates

NRE, FCNR deposits look attractive for customers

Thane bank acquisition

Data quality, retention are challenges before banks

RBI eases branch norms for urban co-op banks

UBS plans to invest $65 m in India service centre