India’s largest private lender, HDFC Bank, has set up a two-day window for Non-Resident External (NRE) deposits offering interest rates that are significantly higher than those currently available, sources said.
The window, which is available on Wednesday and Thursday, offers an annual rate of 6.80 per cent on NRE deposits worth Rs 2 crore to less than Rs 150 crore for tenures ranging from 12 months to 15 months.
For domestic deposits worth Rs 2 crore to less than Rs 5 crore with tenure of one year to less than 15 months, HDFC Bank currently offers 6.25 per cent, data on the lender’s website showed.
HDFC Bank’s move comes after the Reserve Bank of India (RBI) earlier this month temporarily exempted banks from adhering to a regulation that prevented interest rates on NRE deposits outstripping those on comparable domestic term deposits.
An email sent to HDFC Bank did not elicit a response.
The central bank’s move is aimed at attracting more foreign inflows into India at a time when the rupee has been marking new lows against the US dollar. This also comes ahead of the conclusion of the Federal Open Market Committee’s meeting on Wednesday.
In NRE deposits, the foreign currency is converted into rupees at the time of setting up the deposit.