By Dow Jones Business News, September 18, 2013, 12:37:00 PM EDT
By Nupur Acharya
MUMBAI--The Indian units of foreign banks such as Standard Chartered PLC (STAN.LN) and Citigroup Inc. ( C ) have stepped
up efforts to raise dollar deposits from Indians living abroad, after the central bank earlier this month made such
Standard Chartered is offering investors 4.95% interest on three-year dollar deposits of less than $100,000 in India,
according to the bank's website. Until last month, the bank didn't offer a three-year dollar deposit.
The U.K.-based bank is also offering a program to allow customers to take a loan of up to 90% of the deposit.
The offer is expected to make these accounts attractive for Indian living in the U.S. and other Western countries
where bank deposits pay negligible interest.
Citibank is looking at making a similar offer to its clients, a senior executive at the U.S.-based bank told The Wall
The rush to raise dollars from non-resident Indians began after Reserve Bank of India Governor Raghuram Rajan in early
September announced a window for banks to swap dollar deposits with rupees for three years at a very low interest rate
The RBI step allows banks to access cheap rupee funds, which can be used to boost their loan business. The step was
aimed at attracting more dollars as the threat of the U.S central bank scaling back its bond-buying program had
triggered a withdrawal of funds from the economy.
According to Barclays, the swap offer could help attract up to $10 billion.
The rupee, which had lost about 20% of its value against the dollar since the beginning of 2013 through the end of
August, has recovered part of the loss in recent weeks.
Write to Nupur Acharya at email@example.com
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