NRE Deposit Rate Deregulation Extended to Jan 31, 2014
Current · Source: Reserve Bank of India · RBI/2013-14/387 · issued 29 Nov 2013 · ~2 min read
Quick answerRBI extends the freedom for banks to set interest rates on incremental NRE deposits of 3 years and above without any ceiling, originally valid till Nov 30, 2013, now unchanged till Jan 31, 2014, subject to review.
The rule, in the simplest words
Banks can set any interest rate they want on new NRE deposits (money from Indians living abroad) that are kept for 3 years or more, without any upper limit.
This special rule was supposed to end on November 30, 2013, but RBI (India's central bank) has extended it to January 31, 2014.
Banks do not have to keep CRR (a portion of deposits with RBI) or SLR (a portion in government bonds) on these deposits, which saves them money.
The rule applies to all scheduled commercial banks except RRBs (rural banks).
How it plays out — a real example
A forex & trade-finance officer in Indore, Priya, sees that her bank's NRE deposit rates are now free from any ceiling for 3-year deposits until January 31, 2014. She tells her NRI customer, Mr. Sharma, that he can earn a higher interest rate on his new 3-year NRE deposit because the bank can offer competitive rates without worrying about a cap, and the deposit also helps the bank save on CRR/SLR costs.
What changed
The earlier circular (August 14, 2013) allowed banks to offer uncapped rates on incremental NRE deposits of 3 years and above, with the benefit of CRR/SLR exemption. This relaxation was set to expire on November 30, 2013. RBI has now extended the same instructions, unchanged, until January 31, 2014, subject to further review.
What it means for you
Banks can continue to use competitive pricing on longer-tenor NRE deposits to attract non-resident rupee funds without worrying about a rate ceiling. The CRR/SLR exemption on these deposits remains a key advantage, helping banks manage liquidity and cost of funds. This extension gives banks more time to leverage this window for mobilizing stable, long-term NRE deposits.
What you must do
Continue offering uncapped interest rates on incremental NRE deposits with maturity of 3 years and above until January 31, 2014.
Ensure compliance with the CRR/SLR exemption benefit on these deposits as per the original August 14, 2013 circular.
Monitor RBI review timelines and prepare for possible changes after January 31, 2014.
Update internal product documentation and customer communication to reflect the extended validity.
Who it affects
All scheduled commercial banks (excluding RRBs), Treasury and NRE deposit product teams, Non-resident Indian (NRI) customers
❓ Common questions
Does this circular change the interest rate ceiling on NRE deposits?
No. It only extends the existing deregulation—banks still have freedom to set rates without ceiling on incremental NRE deposits of 3 years and above, unchanged from the August 14, 2013 circular.
What is the benefit of CRR/SLR exemption mentioned?
The original circular allowed banks to pass on the benefit of exemption from CRR and SLR requirements on these specific incremental NRE deposits, which helps reduce the cost of funds for banks.
Is this extension applicable to all NRE deposits?
No, it applies only to incremental NRE deposits with a maturity of 3 years and above, as specified in the August 14, 2013 circular.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/387
DBOD. No. Dir. BC.71/13.03.00/ 2013-14
November 29, 2013
All Scheduled Commercial Banks
(Excluding RRBs)
Dear Sir/ Madam
Deregulation of Interest Rates on Non-Resident (External) Rupee (NRE) Deposits
Please refer to our circular DBOD. Dir. BC. 40/13.03.00/2013-14 dated August 14, 2013 allowing banks the freedom to offer interest rates on incremental NRE deposits with maturity of 3 years and above without any ceiling in order to pass on the benefit of exemption provided on such deposits from CRR/ SLR requirements. In terms of para 4 thereof, these instructions are valid up to November 30, 2013, subject to review.
2. In this connection, we advise that the above instructions issued vide circular under reference will remain unchanged till January 31, 2014, subject to review.
3. An amending directive DBOD.Dir.BC.70/13.03.00/2013-14 dated November 29, 2013 is enclosed .
Yours faithfully,
(Rajesh Verma)
Chief General Manager
Encl: As above
DBOD.Dir.BC. 70/13.03.00/2013-14
November 29, 2013
Deregulation of Interest Rates on Non-Resident (External) Rupee (NRE) Deposits
In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949, and in modification of the directive DBOD. Dir. BC. 39/ 13.03.00/ 2013-14 dated August 14, 2013 on Deregulation of 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 directs that instructions issued vide directive referred to above will remain unchanged till January 31, 2014, subject to review.
(B. Mahapatra)
Executive Director
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/387 · issued 29 Nov 2013. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All scheduled commercial banks (excluding RRBs), Treasury and NRE deposit product teams, Non-resident Indian (NRI) customers), your first concrete step on “NRE Deposit Rate Deregulation Extended to Jan 31, 2014” is: “Continue offering uncapped interest rates on incremental NRE deposits with maturity of 3 years and above until January 31, 2014.” (RBI issued this 29 Nov 2013).
Circular: RBI/2013-14/387 -- NRE Deposit Rate Deregulation Extended to Jan 31, 2014
Issued: 29 Nov 2013
Action required: Continue offering uncapped interest rates on incremental NRE deposits with maturity of 3 years and above until January 31, 2014.
Action required: Ensure compliance with the CRR/SLR exemption benefit on these deposits as per the original August 14, 2013 circular.
Action required: Monitor RBI review timelines and prepare for possible changes after January 31, 2014.
Action required: Update internal product documentation and customer communication to reflect the extended validity.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=8601&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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