RBI hikes Interest Rates on NRE and FCNR(B) Deposits

Interest Rates on Non-Resident (External) Rupee (NRE) Deposits

In view of the prevailing market conditions, it has been decided that until further notice and with effect from close of business in India as on November 23, 2011, the interest rates on Non- Resident (External) Rupee (NRE) Term Deposits will be as under:

Interest rates on fresh Non-Resident (External) Rupee (NRE) Term Deposits for one to three years maturity should not exceed the LIBOR/SWAP rates plus 275 basis points, as on the last working day of the previous month, for US dollar of corresponding maturities. The interest rates will also be applicable to deposits with the maturity period exceeding three years and to deposits renewed after their present maturity period.

The interest rate on NRE deposits was LIBOR/SWAP rates plus 175 basis points since November 15, 2008.

Interest Rates on FCNR(B) deposits

It has also been decided that until further notice and with effect from the close of business in India as on November 23, 2011, the interest rates on Foreign Currency Non-Resident (Banks) [FCNR(B)] Deposits will be as under:

Interest rate on FCNR(B) deposits of all maturities contracted effective from the close of business in India as on November 23, 2011, will be within the ceiling rate of LIBOR/SWAP rates plus 125 basis points for the respective currency/corresponding maturities. Interest rate on floating rate deposits will be within the ceiling of SWAP rates for the respective currency/maturity plus 125 basis points and the interest reset period will be six months. The interest rate on these deposits was LIBOR/SWAP rates plus 100 basis points since November 15, 2008.

All other instructions in this regard, as amended from time to time, will remain unchanged.

Alpana Killawala

Chief General Manager