The window, which is open on Wednesdays and Thursdays, offers an annual rate of 6.80 percent on NRE deposits ranging from Rs 2 crore to Rs 150 crore.
According to sources, India’s largest private lender, HDFC Bank, has established a two-day window for Non-Resident External (NRE) deposits with interest rates significantly higher than those currently available.
The window is open on Wednesdays and Thursdays and offers an annual rate of 6.80 percent on NRE deposits worth Rs 2 crore to less than Rs 150 crore for terms ranging from 12 to 15 months.
HDFC Bank currently offers 6.25 percent on domestic deposits worth Rs 2 crore to less than Rs 5 crore with terms ranging from one year to less than 15 months, according to data on the lender’s website.
The move by HDFC Bank comes after the Reserve Bank of India (RBI) temporarily exempted banks earlier this month from adhering to a regulation that prevented interest rates on NRE deposits from outstripping those on comparable domestic term deposits.
An email sent to HDFC Bank received no response.
The move by the central bank is intended to attract more foreign inflows into India at a time when the rupee has been hitting new lows against the US dollar. This comes as the Federal Open Market Committee’s meeting concludes on Wednesday.
When making an NRE deposit, the foreign currency is converted into rupees at the time of deposit.