image

RRBs – Deregulation of Interest Rates on Non-Resident (External) Rupee (NRE) Deposits

RBI/2013-14/193
RPCD.CO.RRB. BC.No.24/03.05.33/2013-14

August 19, 2013

The Chairmen
All Regional Rural Banks (RRBs)

Dear Sir/Madam,

Deregulation of Interest Rates on Non-Resident (External) Rupee (NRE) Deposits

Please refer to our circular RPCD.CO.RRB.BC.No.45/03.05.33(C)/2011-12 dated December 19, 2011 on Deregulation of Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and Ordinary Non- Resident (NRO) Accounts.

2. In terms of para 2 ibid, interest rates offered by banks on NRE deposits cannot be higher than those offered by them on comparable domestic rupee deposits. However, in order to pass on the benefit of exemption provided on incremental NRE deposits with maturity of 3 years and above from CRR/ SLR requirements, it has been decided to give banks the freedom to offer interest rates on such deposits without any ceiling. The extant ceiling on NRO Accounts shall continue.

3. All other instructions in this regard, as amended from time to time, will remain unchanged.

4. These instructions will be valid up to November 30, 2013, subject to review.

5. An amending directive RPCD.CO.RRB.Dir.No.23/03.05.33/2013-14 dated August 19, 2013 is enclosed.

6. Please acknowledge receipt to our Regional Office concerned.

Yours faithfully,

(Madhavi Sharma)
Chief General Manager

Annex

Penal Interest Rates which are linked to the Bank Rate

Item

Existing Rate

Revised Rate
(Effective from July 15, 2013)

Penal interest rates on shortfalls in reserve requirements (depending on duration of shortfalls).

Bank Rate plus 3.0 percentage points (11.25 per cent) or Bank Rate plus 5.0 percentage points (13.25 per cent).

Bank Rate plus 3.0 percentage points (13.25 per cent) or Bank Rate plus 5.0 percentage points (15.25 per cent).

—————————

RPCD.CO.RRB. Dir.No.23 /03.05.33/2013-14

August 19, 2013

Deregulation of Interest Rates on Non-Resident (External) Rupee (NRE) Deposits

In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949, and in modification of the directive RPCD.CO.RRB.Dir.No.44/03.05.33(C)/2011-12 dated December 19, 2011 on Deregulation of Interest Rates on Non-Resident (External) (NRE) Deposits and Ordinary Non-Resident (NRO) Accounts, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby directs that banks are free to offer interest rates without any ceiling on NRE deposits with maturity of 3 years and above. The extant ceiling on NRO Accounts shall continue. These instructions will be valid up to November 30, 2013, subject to review.

Yours faithfully,

Dr.(Smt.) Deepali Pant Joshi
Executive Director

Tags: DeregulationInterest rateNovember 30 2013NRENROReserve Bank of IndiaStatutory Liquidity Ratio

profile image

About eMinds Legal

eMinds Legal

eMinds Legal is a Corporate Law Firm based in Gurgaon, India specializing in Corporate Legal, Corporate Secretarial and Compliance. The Firm comprises of a team of Corporate Lawyers and Company Secretaries with in-depth subject matter knowledge and participative industry experience of over 15 years.

Corporate Law Referencer

Recent Articles

Recent Legal updates

Recent Gst Updates