After the savings deposit interest rates were deregulated and interest rates of small savings linked to market rates, now the deposit rates for NRIs have also been deregulated by the RBI.

The deregulation applies to interest rates on Non-Resident (External) Rupee (NRE) Deposits and Ordinary Non-Resident (NRO) Accounts (the interest rates on term deposits under Ordinary Non-Resident (NRO) Accounts are already deregulated).

Accordingly, banks are free to determine their interest rates on both savings deposits and term deposits of maturity of one year and above under Non-Resident (External) Rupee (NRE) Deposit accounts and savings deposits under Ordinary Non-Resident (NRO) Accounts with immediate effect.

However, RBI has stipulated that interest rates offered by banks on NRE and NRO deposits cannot be higher than those offered by them on comparable domestic rupee deposits.

The RBI has also stipulated that at any point of time, individual banks should offer uniform rates at all their branches.

The revised deposit rates will apply only to fresh deposits and on renewal of maturing deposits

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