November 22, 2005

The Chief Executive Officers of All Primary (urban) Co-operative Banks

Dear Sir/Madam,

Please refer to our circular UBD.PCB.Cir 27/13.01.00/04-05 forwarding therewith directive UBD.No. Dir 1/13.01.00/04-05 dated 01.11.2004 on the above subject. We advise that on a review, it has been decided that until further notice and with effect from close of business in India on November 17, 2005, the interest rates on Non-Resident (External) Rupee (NRE) Savings and Term Deposits will be as under:

The interest rates on NRE Savings deposit accounts shall be at the rate applicable to domestic savings deposits (as against LIBOR/ SWAP rate for six months maturity on US dollar deposits).

The interest rates on fresh repatriable Non-Resident (External) Rupee (NRE) Term deposits for one to three years should not exceed the LIBOR/SWAP rates, as on the last working day of the previous month, for US dollar of corresponding maturity plus 75 basis points (as against 50 basis points effective since November 1, 2004). The interest rates as determined above for three year deposits should also be applicable in case the maturity period exceeds three years. The changes in interest rates will also apply to NRE deposits renewed after their present maturity period.

2. The other instructions issued in this regard shall remain unchanged. An amending directive UBD.No.Dir.1/13.01.000/05-06 dated 22.11.2005 is enclosed.

Yours faithfully

(N.S.Vishwanathan)
Chief General Manager-in-charge

UBD.No.Dir. 1 /13.01.000/2005-06

November 22, 2005

In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 (AACS) and in partial modification of directive UBD.No. Dir 1/13.01.00/ 04-05 dated 01.11.2004 on Interest Rates on Non Resident (External) Rupee (NRE) deposits, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby effects the under noted changes in the interest rates on NRE deposits.

"The interest rates on NRE Savings deposit accounts shall be at the rate applicable to domestic savings deposit accounts (as against LIBOR/SWAP rate for six months maturity on US dollar deposits), effective close of business in India on November 17, 2005".

"The interest rates on Non-Resident (External) Rupee (NRE) deposits for one to three years maturity contracted with effect from close of business in India on November 17, 2005 shall not exceed the LIBOR/ SWAP rates of the last working day of the previous month for US dollar of corresponding maturities plus 75 basis points. The interest rate as determined above shall also be applicable in case the maturity period exceeds three years. The above changes in interest rates will also apply to NRE term deposits renewed after their present maturity period".