Punjab National Bank (PNB) on Friday raised interest rates on NRI deposits of over 3 years by 1 per cent, days after the Reserve Bank deregulated interest rates on such deposits.
The increased interest rates would be applicable on fixed deposits Foreign Currency Non-Resident Bank — FCNR (B) — by the NRI in U.S. Dollars, Pounds, Euros, Japanese Yen, Canadian Dollars and Australian Dollars.
The new rates would be applicable from close of the business on August 14, PNB said in a statement.
The fixed deposits between three and four years in U.S. Dollar would attract 4.78 per cent as compared to 3.78 per cent. Similarly, 4-5 years term deposit would earn 5.17 per cent against 4.17 per cent, it said.
For 5 years, term deposit the new interest rate would be 5.56 per cent as against 4.56 per cent, it added.
Similarly, a one per cent hike has been made in case of term deposits in other currencies like Pounds, Euro, Japanese Yen, Canadian Dollar and Australian Dollar.
Earlier this week, the Reserve Bank deregulated interest rates on NRI fixed deposit schemes and exempted such term deposits from CRR and SLR requirement to attract foreign currency.
These instructions are valid up to November 30, 2013, subject to review.
Besides, banks were also advised incremental FCNR (B) deposits as also NRE deposits with reference base date of July 26, 2013, and having maturity of three years and above, mobilised by banks will be exempt from maintenance of CRR and SLR.
Cash Reserve Ratio (CRR) is the portion of total deposits of banks to be kept with RBI while Statutory Liquidity Ratio (SLR) is the portion of total deposit invested in government securities.
Currently, CRR requirement is 4 per cent and SLR is at 23 per cent.