YES Bank hikes interest rate on non-resident external deposits

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YES Bank hikes interest rate on non-resident external deposits

The private sector lender has raised the interest rate on non-resident external NRE by 50 -- 75 basis points bps and increased the rate on foreign currency non-resident FCNR deposits. This comes after the Reserve Bank of IndiaBank of India has eased certain norms to aid foreign flows.

The NRE Fixed Deposit rate for the tenure of 12 months to less than 18 months has been revised to 7.01% p.a. Similarly, the rate for the tenure greater than 18 months has been revised to 7.25% p.a. These revised rates are applicable for deposits less than INR 5 crores. Furthermore, the Bank is also offering a peak rate of 4.25% p.a. on USD FCNR deposits for the tenure of 24 months to less than 36 months.

The bank said on Friday that it will offer an interest rate of 4.05 per cent on USD deposits with 12 -- 24 months of tenure and 4.25 per cent for 24 -- 36 months of tenure.

The RBI has taken several steps to attract dollars in a bid to protect the local currency and preserve foreign exchange. It was exempted from keeping the cash reserve ratio CRR and statutory liquidity ratio SLR for incremental NRE non-residential external and B foreign currency non-residential deposits with effect from the reporting fortnight beginning July 30.

With effect from July 7, the relaxation will be available for deposits mobilised up to November 4, as well as the ability to raise fresh B and NRE deposits without reference to the regulations on interest rates. The relaxation will be available for a period from October 31, 2022 to October 31, 2022.

The RBI has recently relaxed its rules to attract forex inflows, giving us a chance to hike interest rates on our NRE and FCNR Fixed Deposit offerings. Prashant Kumar, MD CEO, said that the initiative is in alignment with the various strides the Bank has taken to benefit customers in the recent past, which will allow us to diversify and grow YES Bank'sBank's retail portfolio.