Yes Bank hikes FCNR, NRE deposit rates | The Financial Express

Yes Bank hikes FCNR, NRE deposit rates

“The recent relaxation announced by the RBI to attract forex inflows has allowed us a window to hike interest rates on our NRE and FCNR fixed deposit offerings, thus extending the benefit to our customers,” said Prashant Kumar, managing director and chief executive officer of the bank.

Yes Bank hikes FCNR, NRE deposit rates
The interest rate hike follows the recent announcement made by the Reserve Bank of India (RBI) to aid incremental fund flows, the lender said in a press release.

Private sector lender Yes Bank on Friday increased the interest rates on its non-resident external account (NRE) fixed deposits by 50-75 basis points (bps) and on foreign currency non-resident (FCNR) deposits by 20 bps. With this, the NRE fixed deposit rate maturing in up to 18 months stands at 7.01% while for those longer than 18 months it stands at 7.25%, applicable to deposits below Rs 5 crore. The bank will also offer a peak rate of 4.25% on USD FCNR deposits for the tenure of 24 months to less than 36 months.

The interest rate hike follows the recent announcement made by the Reserve Bank of India (RBI) to aid incremental fund flows, the lender said in a press release.

“The recent relaxation announced by the RBI to attract forex inflows has allowed us a window to hike interest rates on our NRE and FCNR fixed deposit offerings, thus extending the benefit to our customers,” said Prashant Kumar, managing director and chief executive officer of the bank.

Also Read: Yes Bank Fixed Deposit rate changed. These account holders to get upto 7.25% interest – Details

The central bank in July decided to allow banks to raise fresh FCNR(B) and NRE deposits without reference to existing restrictions on interest rates till October 31. The RBI had also exempted banks from including incremental FCNR (B) deposits for maintenance of cash reserve ratio (CRR) and statutory reserve ratio (SLR), with reference to base date of July 1. This exemption is allowed till November 1.

The move to lift restrictions on the interest rates offered by banks on foreign deposits was to shore up the capital inflows in the country. As per RBI data, non-resident Indian (NRI) deposits fell sharply to $349 million in Q1FY23 compared to $2.52 billion in corresponding period of previous year while outstanding deposits declined to $135.9 billion as of June 30 as compared to $141.5 billion a year ago.

Following this, major banks such as State Bank of India (SBI), HDFC Bank and ICICI Bank raised interest rates on FCNR deposits. State Bank of India (SBI) has revised the foreign currency non-resident deposits (FCNR) rates on US dollar in the range of 2.85-3.25% per annum on various tenure US dollar deposits with effect from July 10, 2022.

SBI hiked the rate on one-year tenure FCNR deposits to 2.85% from 1.80% while for longer term deposits, the bank has hiked interest rates to up to 3.25% from 2.45% earlier. ICICI Bank increased interest rates to 3.5% for deposits up to $350,000 for 12-24 months tenure. For deposits up to 2 years, HDFC Bank increased interest rates to 3.35%.

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