November 22, 2005
All State Co-operative Banks and District Central Co-operative
Banks
Dear Sir,
Interest Rate on Non-Resident (External) Rupee
(NRE) Deposits
Please refer to our Circulars RPCD.CO.RF.BC
No. 81/07.38.01/2003-04 dated May 12, 2004 and RPCD.CO.RF.BC 53/07.38.01/2004-05
dated November 1, 2004 on Interest Rates on NRE Deposits. On a review, it has
been decided that until further notice and with effect from close of business
in India on November 17, 2005, the interest rates on Non-Resident (External)
Rupee (NRE) Savings and Term Deposits will be as under:
1. NRE Savings Account
The interest rates on NRE Savings deposit accounts
shall be at the rate applicable to domestic savings deposits (as against LIBOR/
SWAP rate for six months maturity on US dollar deposits).
2. Term Deposits
The interest rates on fresh repatriable Non-Resident
(External) Rupee (NRE) Term deposits for one to three years should not exceed
the LIBOR/SWAP rates, as on the last working day of the previous month, for
US dollar of corresponding maturity plus 75 basis points (as against 50 basis
points effective since November 1, 2004). The interest rates as determined
above for three year deposits should 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.
3. The other instructions as contained
in our Circular RPCD.No.RF.Dir.BC 54/D.1-87/88 dated November 2,1987 shall remain
unchanged. An amending directive RPCD RF.Dir.591/07.38.01/2005-06
dated November 22, 2005 is enclosed.
Yours faithfully,
(C.S.Murthy)
Chief General Manager In-Charge
RPCD RF. Dir.591/07.38.01/2005-06
November 22, 2005
Interest Rate on Non-Resident (External) Rupee
(NRE) Deposits
In exercise of the powers conferred by Section
35A of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
and in partial modification of Directive RPCD No.Dir.BC.53/D.1-87/88 dated November
2, 1987, as amended from time to time, on Interest Rates on Deposits, the Reserve
Bank of India being satisfied that it is necessary and expedient in the public
interest so to do, hereby directs undernoted changes in the interest rates on
NRE savings and term deposit accounts:
1.NRE Savings Account
"The interest rates on NRE Savings deposit
accounts shall be at the rate applicable to domestic savings deposit accounts
(as against LIBOR/SWAP rate for six months maturity on US dollar deposits),
effective close of business in India on November 17, 2005".
2.NRE Term Deposits
"The interest rates on Non-Resident (External)
Rupee (NRE) deposits for one to three years maturity contracted with effect
from close of business in India on November 17, 2005 shall not exceed the LIBOR/
SWAP rates of the last working day of the previous month for US dollar of corresponding
maturities plus 75 basis points. The interest rate as determined above
shall also be applicable in case the maturity period exceeds three years. The
above changes in interest rates will also apply to NRE term deposits renewed
after their present maturity period".
(V.S.Das)
Executive Director