In a move to continue the foreign currency inflow, many major banks such as State Bank of India (SBI), Punjab National Bank (PNB) and HDFC bank have hiked the foreign currency deposit rates following Reserve Bank of India, India’s Central Bank that has eased the upper ceiling of foreign deposit rate by 0.50%.
Following the direction of RBI, India’s largest lending bank SBI and premier private sector bank HDFC has announced to revise the interest rates on Foreign Currency Non-Resident (FCNR), Resident Foreign Currency (RFC) and Non-Resident External (NRE) deposits, which has been effective from Wednesday (September 17, 2008) while second largest public sector bank PNB has announced to hike the interest rate only on NRE deposits for foreign currencies including USD, Euro and British Pound, which has also become effective from Wednesday.
On FCNR (B) deposits in US Dollar for the tenure of more than one year and less than two years, SBI has raised the interest rate from 2.46% to 2.96%, while HDFC bank has hiked from 2.45% to 2.95%.
For the deposit terms ranging 2-3 years, 3-4 years and 4-5 years tenures, SBI has increased the rate to 3.06% from 2.56%, 3.38% from 2.88% and 3.6% from 3.10% respectively, while HDFC bank for the 2-3 years and 3-4 years terms has revised the interest rate to 3.05 % and 3.38 % respectively.
For the term-deposit period of five years, it has fixed the interest rate at 3.75%.
For Euro deposits, the interest rate for FCNR (B) would attract 5.08% in SBI for the maturity period of 1-2 years, while in HDFC bank it would be 5.07%. For the period of 2-3 years and 3-4 years, the new revised rates in HDFC bank would now be 4.63 per cent and 4.52 per cent, respectively, as per sources.
The revised interest rate in the British Sterling Pound, SBI has now set the rate at 5.77% for the term-deposit of 1-2 years, while in HDFC bank, it would now 5.07% for the same tenure while for 2-3 years and 3-4 years, the revised rates are 5.15 % and 5.12 %, respectively.
For the RFC deposits in US Dollars, HDFC bank has enhanced the rate of interest for 1-2 years term to 2.95%, while for the maturity periods of 2-3 years and for exact three years, it has been revised to 3.05% and 3.38%.
SBI has raised the interest rate for NRE deposits on the maturity period of 1-2 years to 3.71% from previous 3.21% while for the period of 2-3 years and 3-5 years it has been surged from 3.31% to 3.81% and 3.63% to 4.13% respectively.
Punjab National Bank for NRE deposits has hiked the interest rate by 0.50% on Rupee deposits to strengthen the rupee, while HDFC bank has also revised the interest rates on all term-deposit plans. For the tenure of 1-2 years, it has become 3.71%, while for 2-3 years and 3-5 years, it is now to be 3.81% and 4.13 %.
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