Bank of India raises interest rates on NRE term deposits

December 29th, 2011 - 6:15 pm ICT by IANS  

State Bank of India Mumbai, Dec 29 (IANS) Public Sector Bank of India Thursday said it would raise interest rates on non-resident external (NRE) accounts up to 9 percent from the new year.

On one-to-two-year term deposits, the bank will offer annual interest rate of 9 percent effective from Jan 1, 2012, as compared to the existing rates of 3.82 percent, the bank said in a regulatory filing to the Bombay Stock Exchange.

For the maturity period of 2 to 3 years, the rate will be increased to 8 percent as compared to the existing 3.51 percent, while the deposits for maturity period of three years and above will attract interest rates of 7 percent as compared to the existing 3.64 percent.

Most of the public and private sector lenders have hiked interest rates on NRE term deposits.

In a bid to provide greater flexibility to banks to attract dollars, the Reserve Bank of India early this month deregulated interest rates on NRE rupee deposits and ordinary non-resident accounts.

State Bank of India (SBI), the country’s largest lender, and Punjab National Bank (PNB) Tuesday said they would more than double interest rates on non-resident external accounts up to 9.25 percent.

The country’s largest private bank ICICI Bank has hiked rates up to 9.25 percent.

Last week, HDFC Bank hiked interest rates on NRE deposits of various maturities period up to 9 percent.

IndusInd Bank has hiked rates to 9.25 percent and Yes Bank hiked rates to 9.6 percent.

The existing interest rates on term deposits of most of the banks are in the range of 3-4 percent.

The lenders have hiked rates in a bid to attract deposits from NRIs amid rising interest rates on domestic deposits.

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