RBI/2006-2007/354
UBD
(PCB) CO BPD Cir No: 37/13.01.000/2006-07 April
26, 2007 Chief
Executive Officer of
All Primary (urban) Cooperative Banks Dear
Sir/Madam, Interest
Rates on Non-Resident (External) Rupee (NRE) Deposits - UCBs Please
refer to paragraphs 114 and 116 of the Annual
Policy Statement for the year 2007-08 announced by Governor on April 24, 2007
(copy of the paragraphs enclosed). 2.
Interest Rate on Non-Resident (External) Rupee (NRE) Deposits Please
refer to paragraph 2 of our circular UBD
(PCB) CO BPD Cir No: 28 /13.01.000/2006-07 dated February 5, 2007 on Interest
Rates on Deposits held in Non-Resident External) (NRE) Accounts. 3.
On a review, it has been decided that until further notice and with effect from
close of business in India as on April 24, 2007, the interest rates on Non-Resident
(External) Rupee (NRE) Term Deposits will be as under: The
interest rates on fresh Non-Resident (External) Rupee (NRE) Term Deposits for
one to three years maturity should not exceed the LIBOR / SWAP rates, as on the
last working day of the previous month, for US dollar of corresponding maturities.
(as against LIBOR / SWAP rates plus 50 basis points effective from close of business
on January 31, 2007). The interest rates as determined above for three year deposits
will 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. 4.
A directive to this effect is enclosed. All other terms and conditions applicable
to NRI deposits remain unchanged. 5.
Please acknowledge receipt to our Regional Office concerned. Yours
faithfully, (N.S.Vishwanathan)
Chief
General Manager in-Charge
UBD.No.Dir.2
/13.01.000/2006-07 April
26, 2007 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 1/13.01.00/05-06
dated 05.02.2007 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.
The interest rates on fresh Non-Resident (External) Rupee (NRE) Term Deposits
for one to three years maturity should not exceed the LIBOR / SWAP rates, as on
the last working day of the previous month, for US dollar of corresponding maturities.
(as against LIBOR / SWAP rates plus 50 basis points effective from close of business
on January 31, 2007). The interest rates as determined above for three year deposits
will 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. (V.S
Das)
Executive Director
Paragraphs
114 and 116 of the Annual Policy Statement for the year 2007- 08 Interest
Rate Prescriptions 114.In
the context of large capital inflows and implications for liquidity and monetary
management, there is a need to review the interest rate prescriptions related
to NRI deposits, viz., foreign currency nonresident (banks) [FCNR (B))]
deposits and Non-Resident (External) Rupee Account [NR(E)RA] deposits, especially
in the light of inflation and interest rate differentials between India and the
rest of the world. In this context, the following measures are proposed: (b)Interest
Rate on NR(E)RA Deposits 116.Currently,
the interest rate ceiling on NR(E)RA for one to three years maturity should not
exceed 50 basis points above LIBOR/SWAP rates for US dollar of corresponding maturity.
In view of the prevailing monetary conditions, it is proposed: •to
reduce, with immediate effect, the interest rate ceiling on NR(E)RA deposits by
50 basis points, i.e., to LIBOR/SWAP rates. |