HDFC Bank's two day window to offer 6.8% interest rate on NRE deposits

27 Jul 2022 , 09:25 AM

HDFC Bank, the largest private lender in India, has established a two-day window for Non-Resident External (NRE) deposits that offer interest rates that are much higher than those that are already offered, as per the sources.

The window, which is open on Wednesday and Thursday, provides an annual rate of 6.80% on NRE deposits with denominations ranging from Rs 2 crore to less than Rs 150 crore and terms of 12 to 15 months. According to information on the lender’s website, HDFC Bank is now offering 6.25 percent on domestic deposits with a value between Rs 2 crore and Rs 5 crore and a maturity between one year and less than 15 months.

The Reserve Bank of India (RBI) temporarily excused banks from following a rule that prohibited interest rates on NRE deposits from exceeding those on equivalent domestic term deposits earlier this month, which led to HDFC Bank’s decision.

Aiming to increase foreign investment into India at a time when the rupee has been hitting new lows versus the US dollar, the central bank made this decision. Additionally, this occurs before the Federal Open Market Committee’s meeting on Wednesday comes to an end. At the time the NRE deposit is put up, the foreign money is converted into rupees.