Banks raise rates on NRI deposits, offer up to 6.6%

WITH the Reserve Bank of India (RBI) announcing a dollar swap facility for Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, banks have raised interest rates by 300-350 basis points on dollar-denominated NRI deposits, with some offering as much as 6.6% for tenures of three to five years.

- DIPAK MONDAL

Earlier, FCNR(B) deposits typically offered interest rates of 3-3.5%.

Major lenders including State Bank of India, Bank of Baroda, Axis Bank, HDFC Bank and Yes Bank have increased rates on FCNR(B) deposits targeted at non-resident Indians. Yes Bank is offering one of the highest rates in the market, at 6.6% on five-year dollar-denominated deposits. The bank is offering 6.5% for deposits with maturities of three years to less than four years and 6.55% for deposits with maturities of four years to less than five years.