After giving full-time residents of India a better deal regarding the interest they get on their hard-earned money parked in banks' savings accounts, the same is being implemented for Non-Resident Indians (NRI) too.
In short, NRIs will also enjoy the benefit of the interest calculated on a daily basis. This will bring the NRE/NRO accounts at par with the domestic account holders.
Earlier, this matter was referred to Indian Banks' Association. According to it, payment on a daily basis would only be feasible when computerisation of banks is completed.
Currently, interest is calculated on the minimum balance that is available during the period from the 10th to the last day of each calendar month.
In its notification on the matter the Reserve Bank of India said, "In view of the present satisfactory level of computerisation in commercial bank branches, it is proposed that payment of interest on savings bank accounts (NRE/NRO) by scheduled commercial banks would be calculated on a daily product basis with effect from April 1, 2010."
The notice also asked banks to work out the modalities so that this can be implemented smoothly.