MUMBAI – More banks have entered the race to attract overseas Indians’ money after a dollar-starved Reserve Bank freed the rates on non-resident external accounts, offering interest as high as 9.6 percent per annum.
Three more banks have announced hikes in their non-resident external (NRE) deposit offerings, with mid-size lenders YES Bank and Dena Bank coming out with the highest offer of a 9.6 percent interest rate, while IndusInd Bank has enhanced its NRE deposits to offer a 9.25 percent rate of return.
The hike in the NRE rates by these banks follows similar steps taken by peers like Federal Bank, Dhanlaxmi Bank and HDFC Bank, among others, following the RBI decision to free the rates on December 16 to stem the massive slide of the rupee, which fell to a low of Rs 54.30 per US dollar on the previous day.
State-run lender Dena Bank has come out with a one-year deposit product offering a 9.6 percent yield, as against 3.82 percent earlier. At the lower end, deposits of over one year, but under three years, will fetch an interest rate of 9.25 percent.
Similarly, new-age private sector lender YES Bank has come out with a 15 month-and-15 days to 16-month NRE deposit offer, promising depositors 9.60 percent interest, a statement said.
YES Bank’s peer in the private sector lenders’ space, IndusInd Bank has also increased pricing 9.25 percent, it said in a statement.
“The increased interest rates, backed by the appreciating dollar, will have a considerable impact on rupee flows coming into the country,” IndusInd Head of Consumer Banking, Sumant Kathpalia, said.
The RBI move gave banks the freedom to fix rates on non-resident external rupee deposits and ordinary non-resident accounts with immediate effect.
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