Private sector lenders like HDFC Bank, Yes Bank, Dhanlaxmi Bank, IndusInd Bank and the state-run Allahabad Bank, on Friday, steeply increased the interest rates on select maturities of NRE deposits.
HDFC Bank increased the interest rates on NRE deposits of Rs 1 crore and above with a maturity of one to two years to 9 per cent against 3.82 per cent earlier. It has, however, left the NRO deposit rates unchanged.
Yes Bank too increased the rate on NRE accounts by 2 percentage points to 6 per cent for up to Rs 1 lakh and by 3 percentage points to 7 per cent for over Rs 1 lakh.
Rupee fall spiked inflow
The Allahabad Bank too announced a spike in its NRE deposits up to 7.5 per cent. The bank will now offer 7.5 per cent for one to two years tenor (against 3.82 per cent earlier), 7 per cent on deposits of two to three years (from 3.51 per cent), and 6.75 per cent for those above three years (from 3.64 per cent).
HDFC Bank NRE Services Head Abhay Aima said that the bank has increased the interest on deposits above Rs 25 lakh to 8.5 per cent for tenor under two years. The bank has an NRE deposit base of Rs 7,100 crore.
He also said there has been a considerable spike in the inflows since the rupee fall and opined that such high rates will not last long. Dhanlaxmi Bank too hiked interest rates on NRE deposits to 8 per cent for a maturity of one to three years effective December 26 while the rate for deposits for three years and upto 10 years will be 7.75 per cent, the bank said. Earlier this week, the Federal Bank and Laxmivilas Bank had also increased their rates on these deposits.
On December 16, Federal Bank hiked the interest rates on NRE deposits for 1 year to 6.5 per cent from 3.82 per cent and left the rates on other deposits unchanged. It also said the new rates will be applicable for a limited period from December 19 to 31.
Similarly, Lakshmivilas Bank had revised the interest rates on NRE deposits of various slabs. For one year and under two years, it is offering 10 per cent, 8 per cent for deposits of two to three years and seven per cent for deposits above three years.