• Home
• /
• Markets

NRI deposits in Gujarat 
go up in Q2

The sharp increase in NRI deposits which totalled Rs316.28 billion (8.39 per cent) as of June 30, 2013 has been attributed to depreciation of rupee in the international market which led to higher remittances from abroad.

The latest report of the state-level bankers’ committee (SLBC) also said that the record growth was witnessed despite new regulations by the US government on overseas investments as the three-month period saw the sharpest fall in the rupee.

Foreign exchange experts also believe that the attractive fixed deposit rates announced by the Reserve Bank of India (RBI) for the NRIs was also one of the major reasons for the record increase.

The RBI has increased the Libor (London Inter-Bank Offered Rate) for Foreign Currency Non Resident (FCNR) accounts by up to 350 basis points for the period of three to 10 years.

An NRI holding FCNR account can maintain a fixed deposit account in foreign currency and earn regular interest on the same.

According to experts, the risk for fluctuations in currency is eliminated and investor can earn fixed interest rate through the FCNR account which led to such high deposits. The interest rate offered in India is around 1.5% more than that offered in the US.

— mahesh@khaleejtimes.com