Home › Circulars › RBI/2011-12/278

RBI raises NRE deposit rate cap to LIBOR/SWAP plus 275 bps

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2011-12/278 · issued 24 Nov 2011 · ~2 min read

Quick answerRBI has increased the maximum interest rate on NRE term deposits (1-3 years) from LIBOR/SWAP plus 175 bps to plus 275 bps, effective November 23, 2011. This applies to fresh deposits and renewals, giving co-operative banks more room to offer competitive rates to non-resident Indians.

The rule, in the simplest words

The most a bank can pay on NRE deposits (1-3 years) is now LIBOR/SWAP plus 275 basis points (a basis point is 1/100th of a percent).
This new limit started on November 23, 2011, and applies to new deposits and renewals.
If a deposit is for more than 3 years, use the same limit as for 3-year deposits.
The rate is based on the US dollar LIBOR/SWAP rate from the last working day of the previous month.
This replaces the old limit of LIBOR/SWAP plus 175 basis points.

How it plays out — a real example

Priya, the treasurer at a DCCB, is setting rates for NRE deposits. She checks the USD LIBOR/SWAP rate for 2-year maturity as of the last working day of the previous month, adds 275 bps, and ensures her bank's offered rate does not exceed that. She also updates the renewal letters for existing NRE deposits to reflect the new cap.

What changed

The ceiling on NRE term deposit rates for 1-3 year maturities was raised from LIBOR/SWAP plus 175 basis points to LIBOR/SWAP plus 275 basis points. The new rate applies from close of business on November 23, 2011, and also covers deposits with maturities exceeding three years, using the three-year rate. Renewals of existing NRE deposits after their current maturity will also be subject to the new cap.

What it means for you

Co-operative banks can now offer higher rates on NRE deposits, making them more attractive to NRIs. This could increase NRE deposit inflows, but also raises funding costs. Banks need to update their deposit pricing systems and ensure compliance with the new cap, while monitoring market rates to stay competitive without breaching the ceiling.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Update NRE deposit rate tables to reflect the new cap of LIBOR/SWAP plus 275 bps for 1-3 year maturities.
Apply the new cap to all fresh NRE deposits and renewals effective from November 23, 2011.
For deposits over 3 years, use the same rate as for 3-year deposits.
Review existing NRE deposit renewal processes to ensure compliance with the revised ceiling.
Train staff on the revised rate structure and document the basis for rate setting.

Who it affects

State Co-operative Banks (StCBs), District Central Co-operative Banks (DCCBs), NRI depositors, Bank treasury and deposit operations teams

❓ Common questions

Regulatory timeline

Stated effective date effective November 23, 2011
Decoded by BankPulse 2026-08-01 04:05 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn 03 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Does the new rate cap apply to existing NRE deposits?

No, it applies to fresh deposits and renewals after the current maturity, effective from November 23, 2011.

What is the cap for NRE deposits with maturity over 3 years?

The same rate as for 3-year deposits, i.e., LIBOR/SWAP plus 275 bps.

Which LIBOR/SWAP rate should be used?

The rate for US dollar of corresponding maturities, as on the last working day of the previous month.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)

Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)

RBI’s words: “Official withdrawal register entry #1399: RPCD.CO.RCB.BC.Dir.No.37/07.38.01/2011-12 — "Interest Rate on Non-Resident (External) Rupee (NRE) Deposits" dated November 24, 2011”

📜 Read the original circular — full text as issued by RBI

Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications ( 543 kb ) Interest Rate on Non-Resident (External) Rupee (NRE) Deposits RBI/2011-12/278 RPCD.CO.RCB.BC.No.38/07.38.01/2011-12 November 24, 2011 All State Co-operative Banks (StCBs) and District Central Co-operative Banks (DCCBs) Dear Sir, Interest Rate on Non-Resident (External) Rupee (NRE) Deposits Please refer to our Circular RPCD.CO.RF.BC.No.68/07.38.01/2008-09 dated November 17, 2008 on Interest Rate on NRE Rupee Deposits. In view of the prevailing market conditions, it has been decided that until further notice and with effect from close of business in India as on November 23, 2011, the interest rates on Non-Resident (External) Rupee (NRE) Term Deposits will be as under: The interest rates on fresh Non-Resident (External) Rupee (NRE) Term deposits for one to three years maturity should not exceed the LIBOR / SWAP rates plus 275 basis points, as on the last working day of the previous month, for US dollar of corresponding maturities (as against LIBOR / SWAP rates plus 175 basis points effective from close of business on November 15, 2008). The interest rates as determined above for three year deposits will 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 as contained in our Circular RPCD.No.RF.Dir.BC 54/D.1-87/88 dated November 2, 1987 shall remain unchanged. An amending directive RPCD.CO.RCB.BC.Dir.No.37/07.38.01/2011-12 dated November 24, 2011 is enclosed . Yours faithfully, (C.D.Srinivasan) Chief General Manager RPCD.CO.RCB.BC.Dir.No.37/07.38.01/2011-12 November 24, 2011 Interest Rate on Non-Resident (External) Rupee (NRE) Deposits In exercise of the powers conferred by Section 35 A of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) and in partial modification of Directive RPCD No.Dir.BC.53/D.1-87/88 dated November 2, 1987, as amended from time to time, on Interest Rates on Deposits, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby directs undernoted changes in the interest rates on Non-Resident (External) Rupee (NRE) deposits: "With effect from the close of business as on November 23, 2011, the interest rates on fresh Non-Resident (External) Rupee (NRE) Term deposits for one to three years’ maturity should not exceed the LIBOR / SWAP rates plus 275 basis points, as on the last working day of the previous month, for US dollar of corresponding maturities (as against LIBOR /SWAP rates plus 175 basis points effective from the close of business on November 15, 2008). The interest rates as determined above for three year deposits will 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." (V.K.Sharma) Executive Director Encl: As above 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links : Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn © Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/278 · issued 24 Nov 2011. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6841&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.