Higher Interest rate to NRE Deposits extended upto 28th February,2014
The Reserve Bank of India has allowed banks to offer a higher deposit rate to non-residents till February 28. In August last year, following sharp depreciation of the rupees against the dollar, the central bank deregulated interest rate on Non-Resident Rupee (NRE) deposits for maturity of three years and above. Earlier, banks were allowed to offer interest rate upto the domestic deposit rate of comparable maturity.
"On a review and in order to give banks some time, it has been decided to extend the above dispensation till February 28, 2014," RBI said.
In addition, the central bank also said banks could offer Libor plus 400 bps on FCNR(B) for maturity between 3 and 5 years, till February 28. The ceiling was hiked by 100 bps in August too.
The Reserve Bank of India has allowed banks to offer a higher deposit rate to non-residents till February 28. In August last year, following sharp depreciation of the rupees against the dollar, the central bank deregulated interest rate on Non-Resident Rupee (NRE) deposits for maturity of three years and above. Earlier, banks were allowed to offer interest rate upto the domestic deposit rate of comparable maturity.
"On a review and in order to give banks some time, it has been decided to extend the above dispensation till February 28, 2014," RBI said.
In addition, the central bank also said banks could offer Libor plus 400 bps on FCNR(B) for maturity between 3 and 5 years, till February 28. The ceiling was hiked by 100 bps in August too.
Prakash Nair
Certified Personal Financial Advisor (CPFA)
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