Mumbai: Several banks have increased interest rates on their foreign currency non-resident ,FCNR) after deposit reserve Bank of India Waived the reserve requirements and removed the interest cap earlier this month. However, attracting depositors will be a challenge as foreign investors have an even more attractive option in the form of the US Treasury. yield Some of these exceed the returns of deposits.
Following a 9.1% rise in US inflation, yields on one- and two-year short-term government bonds rose to 3.2% and 3.22%, respectively. Two-year U.S. Treasuries are now offering higher returns than 30-year bonds, which offer 3.12%, reflecting an inversion in the yield curve—which is viewed as a bearish indicator.
country’s largest bank, State Bank Of India Offering between 2.85% and 3% on one-year and two-year dollar deposits, respectively. It offers a slightly higher 3.35% on five-year deposits. HDFC bank Offering between 3.35% on one- to two-year dollar deposits and 2% on five-year deposits. ICICI Bank Offers 3.35% on one to two year deposits over $350,000.
In the past, whenever special schemes were used to attract dollar deposits from non-residents, the difference in their interest rates would be huge. It gave an arbitrage opportunity to non-residents to transfer money to India. Also, banks were given swap options with the RBI, reducing their forex exposure.
SBI, ICICI Bank, HDFC Bank and IDFC First had raised interest rates on non-resident deposits following RBI measures.
Following a 9.1% rise in US inflation, yields on one- and two-year short-term government bonds rose to 3.2% and 3.22%, respectively. Two-year U.S. Treasuries are now offering higher returns than 30-year bonds, which offer 3.12%, reflecting an inversion in the yield curve—which is viewed as a bearish indicator.
country’s largest bank, State Bank Of India Offering between 2.85% and 3% on one-year and two-year dollar deposits, respectively. It offers a slightly higher 3.35% on five-year deposits. HDFC bank Offering between 3.35% on one- to two-year dollar deposits and 2% on five-year deposits. ICICI Bank Offers 3.35% on one to two year deposits over $350,000.
In the past, whenever special schemes were used to attract dollar deposits from non-residents, the difference in their interest rates would be huge. It gave an arbitrage opportunity to non-residents to transfer money to India. Also, banks were given swap options with the RBI, reducing their forex exposure.
SBI, ICICI Bank, HDFC Bank and IDFC First had raised interest rates on non-resident deposits following RBI measures.