November 15, 2008

All Scheduled Commercial Banks
(Excluding RRBs)

Dear Sir,

Please refer to paragraph 1 of our circular DBOD.No.Dir.BC.64/13.03.00/2008-09 dated October 15, 2008 on Interest Rates on Deposits held in Non-Resident (External) Rupee (NRE) Accounts. In view of the prevailing market conditions, it has been decided that until further notice and with effect from close of business in India as on November 15, 2008, the interest rates on Non-Resident (External) Rupee (NRE) Term Deposits will be as under:

The interest rates on fresh Non-Resident (External) Rupee (NRE) Term Deposits for one to three years maturity should not exceed the LIBOR/SWAP rates plus 175 basis points, as on the last working day of the previous month, for US dollar of corresponding maturities (as against LIBOR / SWAP rates plus 100 basis points effective from the close of business on October 15, 2008). The interest rates as determined above for three year deposits will also be applicable in case the maturity period exceeds three years. The changes in interest rates will also apply to NRE deposits renewed after their present maturity period.

Please refer to paragraph 2 of our circular No. DBOD. Dir. BC 64 / 13.03.00 / 2008-09 dated October 15, 2008 on Interest Rates on Deposits held in FCNR(B) Accounts. It has also been decided that until further notice and with effect from the close of business in India as on November 15, 2008, the interest rates on FCNR(B) Deposits will be as under:

In respect of FCNR (B) deposits of all maturities contracted effective from the close of business in India as on November 15, 2008, interest shall be paid within the ceiling rate of LIBOR / SWAP rates plus 100 basis points for the respective currency / corresponding maturities (as against LIBOR / SWAP rates plus 25 basis points effective from close of business on October 15, 2008). On floating rate deposits, interest shall be paid within the ceiling of SWAP rates for the respective currency / maturity plus 100 basis points. For floating rate deposits, the interest reset period shall be six months.

3. All other instructions, as contained in our Master Circulars DBOD. Dir. BC.16/13.03.00/2008-09 dated July 1, 2008, as amended from time to time, shall remain unchanged. An amending directive DBOD.No.Dir.BC. 81 / 13.03.00/2008-09 dated November 15, 2008 is enclosed.

Yours faithfully

(Vinay Baijal)
Chief General Manager

November 15, 2008

';With effect from the close of business as on November 15, 2008, the interest rates on fresh Non-Resident (External) Rupee (NRE) Term Deposits for one to three years maturity should not exceed the LIBOR / SWAP rates plus 175 basis points, as on the last working day of the previous month, for US dollar of corresponding maturities (as against LIBOR / SWAP rates plus 100 basis points effective from the close of business on October 15, 2008). The interest rates as determined above for three year deposits will also be applicable in case the maturity period exceeds three years. The changes in interest rates will also apply to NRE deposits renewed after their present maturity period';.

' In respect of FCNR (B) deposits of all maturities contracted effective from the close of business in India as on November 15, 2008, interest shall be paid within the ceiling rate of LIBOR / SWAP rates plus 100 basis points for the respective currency / corresponding maturities (as against LIBOR / SWAP rates plus 25 basis points effective from the close of business on October 15, 2008). On floating rate deposits, interest shall be paid within the ceiling of SWAP rates for the respective currency / maturities plus 100 basis points. For floating rate deposits, the interest reset period shall be six months.'

(Anand Sinha)
Executive Director