August 14, 2022
  • August 14, 2022

Banks revise FX deposit rates in response to RBI decision

By on July 13, 2022 0




SBI, ICICI Bank and IDFC First Bank raised interest rates on non-resident foreign currency deposits in response to the Reserve Bank’s easing last week to support foreign currency inflows.

The country’s largest private sector lender, HDFC Bank, also revised rates on foreign currency (non-resident) deposits.

However, he clarified that the revision is not in response to the latest RBI decision and that it will take an appeal to revise the rates in the future.

The largest public sector lender, the State Bank of India (SBI), has revised the Foreign Currency Non-Resident Deposit (FCNR) rates on the US dollar to a range of 2.85-3.25% pa on various US dollar deposits starting July 10. , 2022.

The SBI raised the one-year FCNR USD deposit rate to 2.85 from 1.80% previously. For 3-4 year and 5 year deposits, it was increased to 3.10% and 3.25%, respectively. The previous rates were 2.30% and 2.45%.

ICICI Bank has revised the FCNR upwards by 0.15% on deposits greater than and equal to USD 350,000 for a term of 12 to 24 months to 3.50%. The new tariff came into effect on July 13, 2022.

HDFC Bank has revised the FCNR on USD deposits for a duration of 1 year to less than 2 years to 3.35% with effect from July 9, 2022.

However, a bank official said the rate revisions were not in response to the latest RBI decision and that it is studying the impact of the easing of foreign currency deposits.

Equitas Small Finance Bank also announced the revision of the fixed and recurring deposit interest rates of the Non Resident External (NRE) account effective July 13, 2022.

It increased the NRE interest rate to 7.40% for NRE FD for 888 days and to 7.30% for NRE RD for 36 months.

IDFC First Bank has revised rates on FCNR deposits above USD 1 million effective July 13, 2022. For USD deposits, the lender is offering an interest rate of 3.50% on deposits ranging from 1 year less than 5 years old. For USD deposits with a term of 5 years, it offers an interest rate of 2.50%.

On July 6, the RBI further liberalized standards to boost foreign exchange inflows into the country to halt the fall of the Indian Rupee.

Besides easing standards on FCNR deposits, he raised foreign borrowing limits for companies and liberalized standards for foreign investment in government bonds to boost foreign exchange inflows.

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