RBI/2013-14/215
UBD.BPD.(PCB) CIR No.8/13.01.000/2013-14
September 3, 2013
The Chief Executive Officers
All Primary (Urban) Co-operative Banks
Dear Sir/Madam,
Deregulation of Interest Rates on
Non-Resident (External) Rupee (NRE) Deposits
Please refer to our circular UBD.BPD.(PCB) CIR No.16/13.01.000/2011-12 dated December 28, 2011 on Deregulation of Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and Ordinary Non- Resident (NRO) Accounts.
2. In terms of paragraph 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 will 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 UBD.BPD.DIR No.3/13.01.000/2013-14 dated August 30, 2013 is enclosed.
Yours faithfully,
(A.K.Bera)
Principal Chief General Manager
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UBD.BPD.DIR No. 3 /13.01.000/2013-14
August 30, 2013
Deregulation of Interest Rates on Non-Resident
(External) Rupee (NRE) Deposits
In exercise of the powers conferred by Section 35A, read with Section 56 of the Banking Regulation Act, 1949, and in modification of the directive UBD.BPD.DIR No. 5/13.01.000/2011-12 dated December 28, 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 will continue. These instructions will be valid up to November 30, 2013, subject to review.
(S. Karuppasamy)
Executive Director
