RBI Hikes NRE Deposit Rate Cap for UCBs to LIBOR+275 bps
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2011-12/279 · issued 24 Nov 2011 · ~1 min read
Quick answerRBI has raised the maximum interest rate on fresh NRE term deposits for Urban Co-operative Banks from LIBOR/SWAP plus 175 bps to plus 275 bps, effective November 23, 2011. This applies to 1-3 year maturities and renewals.
What changed
The cap on NRE term deposit rates for UCBs was increased from LIBOR/SWAP plus 175 basis points to plus 275 basis points. This change applies to fresh deposits of 1-3 year tenor and renewals, effective from close of business on November 23, 2011.
What it means for you
UCBs can now offer higher rates on NRE deposits, making them more competitive against other banks. This could help attract more NRE inflows but may also increase funding costs. The move aligns with prevailing market conditions to support deposit mobilisation.
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 your NRE deposit interest rate slabs to reflect the new ceiling of LIBOR/SWAP plus 275 bps for 1-3 year tenors.
Ensure all fresh NRE deposits and renewals from November 23, 2011 comply with the revised cap.
Communicate the revised rates to your branches and treasury team for implementation.
Monitor LIBOR/SWAP rates monthly to set compliant deposit rates.
Who it affects
Primary (Urban) Co-operative Banks, NRE depositors, Treasury and deposit operations teams at UCBs
❓ Common questions
Regulatory timeline
Stated effective dateeffective November 23, 2011
Decoded by BankPulse2026-06-18 22:43 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 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 NRE deposits with maturity beyond three years?
Yes, the rate determined for three-year deposits will also apply to deposits with maturity exceeding three years.
Are existing NRE deposits affected by this circular?
The revised cap applies to fresh deposits and renewals after maturity. Existing deposits are not impacted unless renewed.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/279
UBD.BPD. (PCB) CIR No. 12/13.01.000/2011-12
November 24, 2011
The Chief Executive Officers
All Primary (Urban) Co-operative Banks
Dear Sir/Madam
Interest Rates on Non-Resident
(External) Rupee (NRE) Deposits - UCBs
Please refer to our circular UBD(PCB) CO BPD Cir No.25/13.01.000/2008-09 dated November 17, 2008 on the captioned subject.
2. 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.
3. All other instructions in this regard, as amended from time to time, will remain unchanged.
4. An amending directive UBD.BPD.DIR. No.2/13.01.000/2011-12 dated November 23, 2011 is enclosed.
Yours faithfully
(A.Udgata)
Chief General Manager-in-Charge
UBD.BPD.DIR. No. 2 /13.01.000/2011-12
November 23, 2011
Interest Rates on Non-Resident (External) Rupee (NRE) Deposits
In exercise of the powers conferred by Section 35A read with Section 56 of the Banking Regulation Act, 1949, and in modification of the directive UBD.No.Dir 8/13.01.000/2008-09 dated November 15, 2008 on Interest Rates on Deposits held in Non-Resident (External) (NRE) Accounts, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby directs that Interest Rates on Non-Resident (External) Rupee (NRE) Deposits shall be as under:
“With effect from close of business as on November 23, 2011, 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.”
( S. Karuppasamy )
Executive Director
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/279 · 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=6842&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.
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