RBI Deregulated the Interest Rates offered to NRIs
With an aim to boost forex inflows, RBI deregulated the interest rate offered by banks to non-resident Indians (NRIs). Till now, banks were not allowed to pay higher rates for non-resident (external) rupee (NRE) deposits than those for the resident ones.
“Banks are free to offer interest rates without any ceiling on NRE deposits with maturities of three years and above,” RBI said, adding banks would not have to maintain cash reserve ratio (CRR) or statutory liquidity ratio (SLR) for any incremental NRE and foreign currency non-resident FCNR (B) accounts. The interest ceiling for FCNR (B) deposits, for three- to five-year maturities, has been raised 100 basis points to Libor plus 400 bps.
The instructions on interest rates would be valid up to November 30, subject to review, RBI said.
With an aim to boost forex inflows, RBI deregulated the interest rate offered by banks to non-resident Indians (NRIs). Till now, banks were not allowed to pay higher rates for non-resident (external) rupee (NRE) deposits than those for the resident ones.
“Banks are free to offer interest rates without any ceiling on NRE deposits with maturities of three years and above,” RBI said, adding banks would not have to maintain cash reserve ratio (CRR) or statutory liquidity ratio (SLR) for any incremental NRE and foreign currency non-resident FCNR (B) accounts. The interest ceiling for FCNR (B) deposits, for three- to five-year maturities, has been raised 100 basis points to Libor plus 400 bps.
The instructions on interest rates would be valid up to November 30, subject to review, RBI said.
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