ICICI Bank , India’s No. 2 lender, raises foreign currency deposit rates by up to 175 basis points, effective May 8. It raised rates for 1 to 2 year tenure by 75 basis points and for 3 to 5 year tenure by 175 basis points.

The move comes within a week of Reserve Bank hiking interest rate caps on foreign currency deposits by the diaspora in its quest to arrest slide in the rupee.

Under the revised rules, the banks can offer interest rates, which would be 3 per cent above the international benchmark for deposits in the three to five year maturities from the earlier 1.25 percent.

The cap has been kept at 2 percent above international benchmark for deposits of less than three years. ICICI Bank has hiked rates by 0.75 percent for deposits of under three years maturity, while for 3-5 years category, the hike is 1.75 percent.