Indian banks raise NRI deposit rates for dollars

Several Indian banks have raised interest rates on foreign currency deposits for non-resident Indians (NRIs), particularly for U.S. dollar accounts. The move aims to attract more dollar inflows amid global economic uncertainty.

State Bank of India, HDFC Bank, and ICICI Bank are among the lenders that have increased rates on NRE (Non-Resident External) and NRO (Non-Resident Ordinary) deposits. The revised rates apply to deposits of various tenures, with some offering up to 5.5% per annum.

The rate hikes come as Indian banks seek to shore up their foreign currency reserves and meet rising demand for dollar loans. The Reserve Bank of India has also eased norms for NRI deposits to encourage inflows.

Analysts say the higher rates could boost remittances from the Indian diaspora, which is a key source of foreign exchange for India. NRIs in the United States and other countries may benefit from the improved returns on their deposits.