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Wednesday, September 25, 2013

Oriental Bank hikes rates of select NRE deposits

Oriental Bank of Commerce (OBC) has hiked the interest rate on certain non-resident external (NRE) deposits with effect from Monday.

Term deposits of less than Rs 1 crore with maturity of 3-5 years will now earn 9.25 per cent per annum — 50 basis points higher than the earlier 8.75 per cent.

OBC is offering higher interest rate in the 3-5 year bucket to attract long-term funds from NRIs, V. Kannan, Executive Director, OBC, told Business Line.

The Reserve Bank of India had allowed banks to offer differential interest rates to NRIs and also at longer maturities.

Public sector banks are wooing NRIs in a big way to attract long-term funds into the country.

This is being done at a time when deposit growth in the banking system is seeing a slowdown.

With busy season for credit round the corner, many banks are looking up to NRI funds to augment liquidity.

The interest rates offered to NRIs under the NRE deposits are higher than those applicable to domestic deposits, Kannan added.

Source: thehindubusinessline


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