What changed
The earlier circular allowing co-operative banks to offer uncapped rates on incremental NRE deposits of 3 years and above was set to expire on November 30, 2013. RBI has now extended this relaxation until January 31, 2014, keeping all other terms unchanged.
What it means for you
Co-operative banks can continue to attract NRE deposits by offering competitive rates without worrying about CRR/SLR requirements on these incremental deposits. This extension gives banks more time to leverage the exemption and improve their NRE deposit mobilisation strategies.
What you must do
- Update your deposit pricing policies to reflect the extended validity of the deregulation until January 31, 2014.
- Continue offering competitive rates on incremental NRE deposits of 3 years and above to maximise the benefit of CRR/SLR exemption.
- Monitor RBI announcements for any further review or changes after January 31, 2014.
- Ensure compliance with the directive and maintain records of incremental NRE deposits for regulatory reporting.
Who it affects
State Co-operative Banks (StCBs), Central Co-operative Banks (CCBs), NRE depositors and NRIs banking with co-operative banks
Does this extension apply to all NRE deposits or only incremental ones?
The deregulation applies only to incremental NRE deposits with a maturity of 3 years and above, as per the original circular.
Are there any changes to the CRR/SLR exemption?
No, the exemption from CRR/SLR requirements on these incremental deposits remains unchanged under the extended directive.