The Reserve Bank of India (RBI) Wednesday raised the interest rate ceiling on the non-resident external (NRE) rupee deposits and the foreign currency non-resident banks (FCNRB) deposits citing prevailing market conditions.

The interest rates on NRE term deposits for one to three years maturity will now not exceed LIBOR/SWAP rates plus 275 basis points against 175 basis points earlier.

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, the Reserve Bank of India said in a release.

The RBI added the interest rate ceiling on FCNRB deposits of all maturities will now be LIBOR/SWAP rates plus 125 basis points from 100 basis points earlier.