Interest Rate on NRE Term Deposit Accounts
Interest rates on fresh repatriable Non-Resident (External) Rupee (NRE) deposits for one to three years contracted effective close of business in India on November 17, 2005 should not exceed 75 basis points (as against 50 basis points effective since November 1, 2004) above the London Inter Bank Offered Rate(LIBOR)/Swap rates for US dollar of corresponding maturity.
The maturity period of repatriable NRE deposits would continue to be one to three years and the interest rate as determined above for three year deposits would also be applicable in case the maturity period exceeds three years.
The changes in interest rates will also apply to repatriable NRE deposits renewed after their present maturity period.
It may be recalled that with a view to aligning interest rates on repatriable Non-Resident (External) Rupee (NRE) deposits with international interest rates, ceiling on NRE deposit rates linked to the US dollar LIBOR/Swap rates of corresponding maturity was introduced effective July 17, 2003. The ceiling interest rates on NRE deposits have since been revised from time to time.
Interest Rate on NRE Savings Deposits
The interest rate on NRE savings deposits will be at rate applicable to domestic savings deposits (as against the ceiling of LIBOR/Swap rates for six month maturity on US dollar deposits) effective close of business in India on November 17, 2005.
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