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RBI to lure NRIs with higher interest rate

The changes in interest rates will also apply to repatriable NRE deposits renewed after their present maturity period.

india Updated: Dec 28, 2005 19:04 IST

It is encouraging news for Indians who want to earn interest on their savings, which in view of pound and rupee ratio will be highly attractive. The Reserve Bank of India (RBI) is attempting to lure NRIs with higher interest rate on deposits with Indian Banks.

The maturity period of repatriable NRE deposits would continue to be one to three years. The changes in interest rates will also apply to repatriable NRE deposits renewed after their present maturity period.

The move is accelerating inflow of NRI funds in the banking sector. The RBI has recently increased interest rates on NRE term deposit accounts. From now onwards, banks can offer a return of 75 basis points over the London inter-bank offered rate (Libor) for dollars, which is currently 4.58% for six months.

Another scheme, the Overseas Citizenship of India (OCI) scheme would go a long way towards meeting much more than the emotional yearning for greater affinity with the 'homeland'. The OCI offers tangible privileges and benefits that exceed those under the Persons of Indian Origin (PIO) scheme.

The OCI may not get an Indian passport, but the next best thing: a lifetime, multipurpose, multi-entry visa that is incorporated in his foreign passport: and a registration certificate resembling an Indian passport but in a different colour.

First Published: Dec 28, 2005 19:04 IST