The Indian rupee was the worst-performing major currency in Asia last year(2011), falling by nearly 16% against the U.S. dollar, as a gaping current-account deficit and high government spending triggered capital outflows from the country.
RBI made interest rates on NRE deposits and NRO accounts deregulated. Banks given the freedom to determine their interest rates on both savings deposits and term deposits of maturity of one year and above under NRE deposit accounts and savings deposits under NRO accounts from December 16, 2011. However, interest rates offered by banks on NRE and NRO deposits cannot be higher than those offered by them on comparable domestic rupee deposits.
SBI said in a press release that deposits below 10 million rupees will earn interest rates of 9.25 percent, while those above 10 million rupees will earn 9% for 1-2 years maturity from 3.82% earlier
ICICI Bank raised the interest rate for NRE deposits up to Rs 1,00,00,000, with a maturity tenure of one year to 389 days, to 8.25 per cent, while for tenure of 390 days, the bank will be offering 9.25 per cent. The new rates from ICICI Bank will be effective from Thursday
IDBI Bank will offer 9.25 per cent for NRE deposits with a maturity period of one year. For deposits, with maturity ranging from one-year-one-day to 10 years, bank will offer 9.5 per cent. The new rates from IDBI Bank have become effective from Wednesday.
Indian Bank has also revised its interest rate on NRE deposits at 9.50 per cent for one year and above and up to three years for deposits of amounts less than Rs 15 lakh on non-resident external term deposits with immediate effect