Banks revise forex deposit rates in response to RBI relaxations last week – Times of India

Country’s largest private sector lender HDFC Bank has revised rates on foreign currency (non-resident) deposits.

New Delhi: SBI, ICICI Bank and IDFC First Bank have raised interest rates on foreign currency non-resident deposits in response to the Reserve Bank’s relaxation last week to boost foreign exchange inflows. Country’s largest private sector lender HDFC Bank has also revised rates on foreign currency (non-resident) deposits.
However, it clarified that the revision is not in response to the RBI’s latest move and it will take a decision on the rate revision going forward.
State Bank of India (SBI), the largest public sector lender, has revised foreign currency non-resident deposit (FCNR) rates on the US dollar by 2.85-3.25 per cent per annum with effect from July 10. , 2022.
SBI has increased the rate on FCNR USD deposits from 1.80 per cent to 2.85 per cent for a tenure of one year. For deposits of 3-4 years and 5 years, it has been increased to 3.10 per cent and 3.25 per cent respectively. The previous rates were 2.30 per cent and 2.45 per cent.
ICICI Bank has increased the FCNR by 0.15 per cent to 3.50 per cent on deposits above and equal to USD 350,000 for a period of 12-24 months. The new rate has come into effect from July 13, 2022.
HDFC Bank revised FCNR on USD deposits to 3.35 per cent with effect from July 9, 2022, on USD deposits of less than 1 year.
However, a bank official said that these rate revisions were not in response to the latest move by the RBI and it is studying the impact of relaxation in foreign currency deposits.
Equitas Small Finance Bank also announced revision of interest rates for fixed and recurring deposits of Non-Resident External (NRE) account with effect from July 13, 2022.
It has increased the NRE interest rate to 7.40 per cent for NRE FDs for 888 days and to 7.30 per cent for 36 months for NRE RDs.
IDFC First Bank has revised rates on FCNR deposits above $1 million with effect from July 13, 2022. For US dollar deposits, the lender offers an interest rate of 3.50 percent for deposits of less than 1 year to less than 5 years. USD deposit for a tenure of 5 years, it offers 2.50 percent interest rate.
On July 6, the RBI further liberalized norms to promote foreign exchange inflows into the country to arrest the fall in the Indian rupee.
Apart from easing norms on FCNR deposits, it raised foreign borrowing limits for companies and liberal norms for foreign investment in government bonds to boost foreign exchange inflows.