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Home / Features / NRIs to benefit from low interest loans and guaranteed high returns on new or existing NRE FDs

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NRIs to benefit from low interest loans and guaranteed high returns on new or existing NRE FDs

Emirates NBD, a leading banking group in the region, today announced a partnership with YES BANK, India’s fifth largest private sector bank to offer credit facilities against NRE fixed deposits that allows Non-Resident Indians (NRIs) in the UAE to avail high loan amounts coupled with flexible repayment options, while continuing to enjoy guaranteed returns on their existing fixed deposits in India. The NRE FD credit facility is available both on Non-Resident External Fixed Deposits (Currency: Indian Rupee) or NRE Foreign Currency Fixed Deposits (Currency: USD only).

The NRE FD credit facility will be offered to UAE-based NRI customers of Emirates NBD who are also customers of YES BANK. The NRE FD credit facility can either be obtained as a loan in the UAE against an existing NRE/ FCNR Fixed Deposit in YES BANK in India, or as a loan to augment a fixed deposit in India. In both options, the customer benefits from the higher guaranteed returns on the fixed deposits in India, while having to pay lower interest rates on the loan in the UAE.

Commenting on the NRE Fixed Deposit credit facility, Suvo Sarkar, Senior Executive Vice President and Group Head – Retail Banking and Wealth Management, Emirates NBD, said: “Indian expatriates in the UAE are often caught between the desire to accumulate savings in the home country via fixed deposits and benefiting from the investor-friendly policies of the UAE, through setting up businesses or buying property here. Emirates NBD’s new NRE FD credit facility addresses this dilemma in an innovative manner to offer customers a win-win solution. NRIs intending longer stays in the UAE can now grow their savings in a safe and secure manner in their home country while also gaining continued access to liquidity in the UAE.

“We are delighted to partner with YES BANK to offer this facility in a first-of-its-kind initiative to NRI clients of the two banks. A customer can avail a secured loan at a very low interest rate against an FD in India, while continuing to receive high tax free returns on the FD, which remains unbroken. Currently, YES BANK offers one of the best interest rates on NRE FDs in India, and we are happy to enable our customers benefit from this attractive return.”

Speaking on the partnership, Pralay Mondal, Head, Retail & Business Banking, YES BANK said, “As a knowledge driven bank, YES BANK understands the specific needs of NRIs and we are proud to partner with Emirates NBD to provide convenience to our NRI customers through liquidity (in AED) in the UAE against their deposits in India. GCC is an important geography for YES BANK’s GIB proposition and the Gulf foray will play a key role in our aspiration to become “The Finest Quality Bank of the World by 2020”.

If obtained as a loan against an existing NRE/ FCNR FD in India, the NRE FD credit facility allows customers to get a loan amount of up to 80% of the total deposit in UAE Dirhams, at an interest rate starting at 3.99% p.a. The customer continues to benefit from the higher interest rate of up to almost 7% p.a. with the added advantage of not breaking his original FD.

The NRE FD credit facility can also be obtained as a loan where the customer deposits 20% of the targeted total deposit to be attained over a designated tenor. The remaining 80% of the target deposit amount is offered by Emirates NBD as a loan, at a very low interest rate and the entire amount is placed in a fixed deposit at a partner bank in India. The customer benefits from the higher interest rate received on the FD, which enables him to pay his monthly interest payments without additional burden on his finances.

The NRE FD Facility has multiple repayment options to be chosen by the customer as per his convenience and repayment capability. The interest only facility allows customers the option of repaying only the interest (minus the EMI) till the end of the tenor. However, in the last month of the loan tenor, he pays the interest as well as the full principle amount (collectively). Another attractive pricing option is the 0% interest rate, wherein a customer pays no interest on the loan but instead pays an upfront (fixed) processing fee at the time of taking the loan.

The new programme from Emirates NBD is in line with the bank’s strategy of offering value-added products that meet the specific requirements of Indian expatriates in the UAE, who represent a significant percentage of the bank’s customer base.

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