RBI deregulation of NRE Deposit Rates

Following the deregulation Non-Resident Indian deposits (NRI) by the Reserve Bank of India, banks within the country can now set their own interest rates for fixed deposits above one year (NRE accounts) and savings accounts (NRO accounts). These changes should enable banks to offer rates comparatively similar to local domestic Indian deposit accounts. However precautions have been advised by the RBI including NRO and NRE accounts cannot be higher then local domestic accounts as well as rates should be uniform across their branches. RBI believes these changes will bring in more strength to the local currency by attracting more foreign currency inflows which could also tame  some inflation as well.