SBI to targets NRIs with new scheme

State Bank of India on similar lines to Resurgent India Bonds and India Millennium Deposits is planning to raise around $2 billion from Non Resident Indian by launching a new deposit scheme. The objective behind the launch of such a scheme is to take an advantage of high local interest rates.

The scheme is being discussed with Reserve Bank of India, details like time duration and the interest rate were being worked out. According to bank officials, "The roadshows for this new scheme will kick off around the world in the last week of July".

India's foreign exchange reserves were at a record high of $82.774 billion on July 4, helped by strong portfolio investment. The news led the rupee raise against the dollar to 46.03/04 closing at 33 month high of 46.1050/1150. The new scheme coincides with the redemption of the Resurgent India Bonds (RIBs), which raised $4.2 billion from expatriate Indians in 1998 and are due for redemption in October.

The State Bank of India (SBI) raised the amount on behalf of the central government from expatriate Indians to shore up the country's external finances after the United States and other developed countries slapped economic sanctions against the country in retaliation for carrying out nuclear tests.