NRI deposits by NBFCS: RBI cap on interest

In line with non resident external (NRE) deposits, the Reserve Bank of India has said that interest rate on fresh repatriable non-resident Indian (NRI) deposits accepted by non-banking financial companies (NBFCs) should not exceed the Libor or swap rate for the US dollar.

The changes, which came into effect from close of business on April 17, would also apply to renewed repatriable NRI deposits after their present maturity period, RBI said in a release here today.

Other instructions relating to maturity period of deposits would remain unchanged.

The RBI on Saturday had said that interest rates on NRE rupee term deposits for one to three years should not exceed the Libor or swap rate.