Gabe, yours is an opinion I disagree with totally. Your advice seems to be directed at overseas Goans. I will show why it's a bad idea to invest in Rupee FDs in any Indian bank, whether the purpose is to eventually spend the money in India or repatriate it to its origin.
For example SBI offers 9.25% for a 2 year term. The Indian inflation rate (if you believe official figures) is currently 8.62%. That gives an effective yield of 0.63% on your investment. That would not please anyone. For overseas investors, it is not Indian inflation rate that is of consequence but the rupee conversion, since the money is intended to be repatriated. Taking latest figures, from 20th July 2011 to 18th Aug 2011, (one month) the Indian rupee fell by 2.70% against the USD. Annualize that and assume the trend may continue and it jumps off the paper. Certainly overshadows the 9.25% interest rate you are getting. Huge exchange risk. Not to mention the results to your investment if you get caught with an Indian currency devaluation should the country want to make it fully convertible, during the term of the FD. Either way not a good investment. Savvy people in India will look elsewhere in the markets to get a better yield, even if not guaranteed, and savvy people overseas will not consider the abovementioned exchange risks worth taking, assuming they can repatriate their money (which they probably cannot in the type of account that is able to get those rates). You have my opinion. Now please explain how you see it. Roland. Toronto. -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Gabe Menezes Sent: Friday, August 19, 2011 9:41 AM To: Goa's premiere mailing list, estb. 1994! Subject: [Goanet] US Bank prime rates in the Eighties. With markets in a tizzy put your money in a State owned Indian Bank with a yield of 8 percent plus that's in Rupees of course. -- DEV BOREM KORUM Gabe Menezes.
