The Reserve Bank of India implemented quite a few steps to curb the falling rupee. But recently it has touched a high of Rs 54 per dollar putting more pressure on the policy makers. With this peak, the central bank who is watching the show couldn't resist itself to just stay calm. It promptly removed the restrictions imposed on the interest rates on the Non-Resident External (NRE) account and Non-Resident Ordinary (NRO) account to get more foreign currency in.
With this the banks are free to determine interest rates on their NRE and NRO accounts. The move will invite more foreign currency in India which could aid to curb the falling rupee.
Right after the RBI's move, number of banks revised their interest rates applicable on NRE and NRO accounts.
Below are the revised interest rates by the banks:
HDFC Bank, India's second largest private lender increased the interest rates on NRE deposits of Rs 1 crore and above with a maturity of one to two years to 9% as against 3.82% earlier. And, interest rate on NRE deposits above Rs 25 lakh with two year tenor has been raised to 8.5%.
Yes Bank increased the interest rates on NRE deposits upto Rs 1 lakh by 2 percentage points to 6% and for above Rs 1 lakh it increased by 3 percentage points to 7%.
The Allahabad Bank declared a hike in its NRE deposits upto 7.5%.
The Kolkata-based bank increased from 3.82% to 7.5% for one to two years tenor, 3.51% to 7% on deposits of two to three years and 3.64% to 6.75% for those above three years.
Dhanlaxmi Bank raised interest rates on NRE deposits to 8% for a deposits of one to three years and in between three to ten years to 7.75%.
Lakshmi Vilas Bank increased the interest rates on NRE deposits, 10% for one to two years, 8% for deposits of two to three years and 7% for deposits above three years.
(Inputs from PTI)