NRI deposit in Gujarat Banks continue to grow

Mumbay, Nov 26, 2008
Sonu Parkash

NRI deposits in some banks in Gujarat have been increased:

• Bank of Baroda across Gujarat were Rs 5,041 crore in August, which jumped to Rs 5,375 crore in September. Between August and October, NRI deposits in their branches across Gujarat increased by Rs 334 crore.
  
• State Bank of India's current fiscal till October, total NRI deposits in their branches across Gujarat have grown by Rs 651 crore, from Rs 5,980 crore in March to Rs 6,631 crore

Most of the NRI deposit is coming from USA and UK.

RBI's recent announcement:

• Interest rates on fresh Rupee NRE term deposits for one to three years maturity should not exceed the LIBOR/SWAPS, rates plus 175 basis points, for US dollar of corresponding maturities
• To allow margin over benchmark interest rates London Interbank Offered Rate (LIBOR) continues to have a positive impact on FCNR and NRE deposits

The flow of NRI funds increased from UK and USA may be due to bankruptcy of some major financial institutions and confidence back in India's economy.