.........Recently, the Reserve Bank (RBI) announced that banks were free to determine their interest rates under Non-Resident (External) Rupee Deposit Account and Non-Resident Ordinary Account. Since the exchange rate risk in respect of the repatriable rupee deposits is borne by the depositor, I am not sure that, in the current situation of currency depreciation, a wealthy NRI will be influenced considerably by higher interest rates on term deposits, unless they are sufficient to provide reasonable returns after factoring in the expected loss in the value of the rupee or the hedging cost..................
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