The Reserve Bank of India (RBI) on Friday deregulated interest rates on non-resident external rupee deposits and ordinary non-resident accounts, to provide greater flexibility to banks in mobilising such deposits and also in view of the prevailing market conditions.

Banks are free to determine interest rates on both savings deposits and term deposits, of maturity of one year and above, under NRE rupee deposit accounts and savings deposits under NRO accounts with immediate effect, the RBI said in a notification after market hours.

The revised deposit rates will apply only to fresh deposits and on renewal of maturing deposits and such rates cannot be higher than those offered on comparable domestic rupee deposits, the notification said.