Banks hike interest rate on non-resident deposits by 50 bps

A day after the Reserve Bank of India announced an increase in interest rate ceiling by 50 basis points on non-resident deposits; two public sector lenders have raised FCNR and NRE term deposit rates.

Punjab National Bank and Dena Bank have increased rates by half a percentage point on non-resident deposit schemes in US dollar, British pound, euro, and Australian and Canadian dollar across all maturities with immediate effect.

The interest rate on US dollar deposits have been raised to 4.21 per cent for a maturity of one-two years from 3.71 per cent. For the maturity of two-three years, the rate is revised to 3.52 per cent, against 3.02 per cent, the banks said in separate statements.

 

For tenure of three-four years, the interest rate has been raised to 3.81 per cent from 3.31 per cent and on four-five years term deposit the new rate is at 3.95 per cent and the rate for fixed deposit for five years has been pegged at 4.14 per cent.

On NRE term deposits, the applicable rate of interest for maturities of one year to less than two years has been raised by 50 basis points to 4.96 per cent and 4.26 per cent for maturity in between two-three years.

The interest rate is pegged at 4.56 per cent for the maturity of three-five years, against 4.06 per cent earlier, it added.

More banks are likely to announce the rates in a day or two to lure non-resident deposits.