Interest Rate Increases on NRE and FCNR (B) Deposits

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Nov. 29 – Because of the current market situation, it has been decided by the government of India that interest rates on non-resident external (NRE) rupee term deposits for one to three years maturity should not go above the LIBOR/SWAP rates plus 275 basis points, as on the last working day of the previous month, for U.S. dollar of corresponding maturities. The interest rates will also be valid to deposits with the maturity period beyond three years and to deposits renewed after their present maturity period.

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

Interest rates on FCNR (B) deposits
Interest rates on foreign currency non-resident banks [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 particular currency/corresponding maturities.

Interest rates on floating rate deposits will be within the upper limit 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 had been LIBOR/SWAP rates plus 100 basis points since November 15, 2008.

All other directions in these subjects, as amended from time to time, will remain unaffected.

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