Soon after Reserve Bank of India has eased certain norms to aid incremental foreign flow, private sector lender Yes Bank has raised the interest rate on Foreign Currency Non-resident Deposits (FCNR) and Non-Residential External (NRE) fixed deposits.
Accordingly, the Non-Residential External (NRE) fixed deposit rate for 12-18 months has been revised to 7.01 per cent per annum. The interest rate for tenure exceeding 18 months has been revised to 7.01 per cent per annum.
Further, the interest rate for tenure exceeding 18 months has been revised to 7.25 per cent. It may be mentioned here that the new rates are for deposits less than Rs. 5 crores.
For deposits of 12-24 months, the lender is offering an interest rate of 4.05 per cent on USD FCNR deposits. For deposits of 24-36 months the interest is 4. 25 per cent.
The RBI has taken several steps to attract dollars in a bid to protect local currency and conserve foreign currency and conserve foreign exchange. By the beginning of July 30, banks were exempted from maintaining cash reserve ratio (CRR) and Statutory Liquidity Ratio for incremental NRE and FCNR deposits effective since July 30.
This relaxation will be available for deposits mobilized up to November 4, 2022. Banks are also allowed to raise fresh FCNR and NRE deposits without reference to the regulations on interest rates effective since July 7. This relaxation shall be available for a period up to October 31.
Managing Director and CEO of Yes Bank, Prashant Kumar commented, “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. This initiative is in alignment to the various strides the Bank has taken in the recent past to benefit customers which will allow us to further diversify and grow Yes Bank’s retail portfolio."
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