Mumbai, Sept 16: State Bank of India will lower the interest rate on a special rupee deposit scheme for expatriates it is launching next week following a change in rates by the Reserve Bank of India, a senior official said on Tuesday. "The interest rates that will be offered will comply with the new central bank norms," the official who did not wish to be identified said. "We are going ahead with the schemes."
SBI, the country's largest commercial bank, expects to retain 30 to 35 per cent of the Resurgent India Bonds (RIBs) that raised $4.2 billion in 1998 through two new deposit schemes to be launched on September 24, the official said.
The RIBs mature on October 1 and the redemption will see outflows of $5.5 billion.
Late on Monday, the Reserve Bank of India lowered the ceiling on the interest rate banks can offer on repatriable non-resident external (NRE) rupee deposits to 100 basis points above LIBOR, from 250 basis points earlier.
The move reduces interest rate differentials between India and developed countries, making it less attractive for expatriates to park funds in the country. Bureau Report