Citibank today became the first foreign lender to hike interest rates on NRE deposits in the wake of RBI deregulating interest rate offered on deposits by non-resident Indians early this month.
Citi's rates vary between 5% and 8.75% across maturities, and are lower than the aggressive strategies adopted by domestic lenders who are offering as high as 10% a year.
A deposit of over Rs 30 lakh but under Rs 50 lakh will earn an interest of 8.75% for a 356-400 days bucket and 8.50% for 401-1095 days, Citi said in a statement issued here.
Meanwhile, the city-based private lender Development Credit Bank (DCB) today increased interest rates on non-resident external (NRE) deposits to 10% for an 18-month tenor on deposits of Rs 15-50 lakh, making it the highest offering.
For deposits under Rs 15 lakh for the same tenor, the interest rate is 9.75%, the bank said.
Almost all the domestic banks, including the country's largest lender SBI and ICICI have sharply upped their NRE deposit rates in the last fortnight following a Reserve Bank move to deregulate interest rates on NRE deposits earlier this month to attract more dollars into the economy in its bid to arrest the steep fall in rupee.
