RBI/2005-06/216
UBD.PCB. No. Cir17 /13.01.000/2005-06
November 22, 2005
The Chief Executive Officers of All Primary (urban) Co-operative
Banks
Dear Sir/Madam,
Interest Rate on Non-Resident (External) Rupee
(NRE) Deposits
Please refer to our circular UBD.PCB.Cir 27/13.01.00/04-05
forwarding therewith directive UBD.No. Dir 1/13.01.00/04-05 dated 01.11.2004
on the above subject. We advise that on a review, it has been decided that until
further notice and with effect from close of business in India on November 17,
2005, the interest rates on Non-Resident (External) Rupee (NRE) Savings and
Term Deposits will be as under:
(i) NRE Savings Account
The interest rates on NRE Savings deposit accounts
shall be at the rate applicable to domestic savings deposits (as against LIBOR/
SWAP rate for six months maturity on US dollar deposits).
(ii) Term Deposits
The interest rates on fresh repatriable Non-Resident
(External) Rupee (NRE) Term deposits for one to three years should not exceed
the LIBOR/SWAP rates, as on the last working day of the previous month, for
US dollar of corresponding maturity plus 75 basis points (as against 50 basis
points effective since November 1, 2004). The interest rates as determined
above for three year deposits should also be applicable in case the maturity
period exceeds three years. The changes in interest rates will also apply to
NRE deposits renewed after their present maturity period.
2. The other instructions issued in this
regard shall remain unchanged. An amending directive UBD.No.Dir.1/13.01.000/05-06
dated 22.11.2005 is enclosed.
Yours faithfully
(N.S.Vishwanathan)
Chief General Manager-in-charge
UBD.No.Dir. 1 /13.01.000/2005-06
November 22, 2005
Interest Rate on Non-Resident (External) Rupee
(NRE) Deposits
In exercise of the powers conferred by Section
35A of the Banking Regulation Act, 1949 (AACS) and in partial modification of
directive UBD.No. Dir 1/13.01.00/ 04-05 dated 01.11.2004 on Interest Rates on
Non Resident (External) Rupee (NRE) deposits, the Reserve Bank of India being
satisfied that it is necessary and expedient in the public interest so to do,
hereby effects the under noted changes in the interest rates on NRE deposits.
(i) NRE Savings Account
"The interest rates on NRE Savings deposit
accounts shall be at the rate applicable to domestic savings deposit accounts
(as against LIBOR/SWAP rate for six months maturity on US dollar deposits),
effective close of business in India on November 17, 2005".
(ii) NRE Term Deposits
"The interest rates on Non-Resident (External)
Rupee (NRE) deposits for one to three years maturity contracted with effect
from close of business in India on November 17, 2005 shall not exceed the LIBOR/
SWAP rates of the last working day of the previous month for US dollar of corresponding
maturities plus 75 basis points. The interest rate as determined above
shall also be applicable in case the maturity period exceeds three years. The
above changes in interest rates will also apply to NRE term deposits renewed
after their present maturity period".
(V.S Das)
Executive Director
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