Indian banks raise NRI deposit rates for dollars

Several Indian banks have raised interest rates on foreign currency deposits for non-resident Indians (NRIs), aiming to attract more dollar inflows. The move follows a tightening of global liquidity and a rise in U.S. interest rates.

State Bank of India, the country's largest lender, increased rates on NRI foreign currency deposits by up to 75 basis points for certain tenors. Other major banks, including HDFC Bank and ICICI Bank, also announced similar hikes.

The higher rates apply to deposits in U.S. dollars, British pounds, and euros. Banks are offering up to 4.5% per annum on one-year dollar deposits, compared with earlier rates of around 3.75%.

Analysts say the rate increases are intended to stem an outflow of NRI funds and bolster India's foreign exchange reserves. The Reserve Bank of India has also taken steps to encourage NRI deposits by easing regulations.