Banks revise interest rates on FCNR, NRE term deposits

Mumbai, Jan 2 | Updated: Jan 3 2006, 07:03am hrs
As the London inter-bank offer rate (Libor) is rising, Indian banks are compelled to revise the interest rates on its foreign currency non-repatriable (FCNR) and non-resident external (NRE) term deposits.

Kickstarting the exercise, the country's largest private sector bank, ICICI Bank has revised its interest rates on NRE fixed deposits and FCNR deposits.

For instance, the interest rates on NRE fixed deposits for a maturity period between 12-18 months has been increased to 5.64% per annum (from the earlier rate of 5.6%), while the rates on NRE deposits for the period between 18-24 months has been revised to 5.63% (5.60%). In case of deposits for 24-36 months' duration, the deposits rates have been kept unchanged at 5.62%, even as the rates for those having maturity of 36-120 months, have been reduced to 5.62 % (5.70%).

Interest rates on one-year FCNR deposits denominated in dollars has been increased by 9 basis points, while interest rates on euro-denominated and Canadian-dollar denominated FCNR deposits has been increased by up to 10 basis points and 15 basis points, respectively for various maturities. In another instance, state-owned Union Bank of India has also increased the interest rate on its FCNR (B) and NRE (rupee) term deposits. The interest rates on NRE term deposits for the a maturity period of 1-2 years, has been increased to 5.64% (5.60%), while the rates for deposits of 2-3 years, has been revised to 5.62% (5.6%.)

In case of FCNR (B) deposits denominated in dollars, the interest rates for a maturity period of 1-2 years has been increased to 4.64% (4.55%) earlier, while FCNR (B) deposits denominated in pound for the same period has been increased to 4.41% (4.32%).