Mumbai, June 25 -- The 'colour' of money is set to literally determine how much interest depositors earn, as banks have started rolling out the red carpet for customers overseas. The Reserve Bank of India's (RBI) latest measures to attract dollar deposits will likely give overseas Indians a better deal than domestic savers. And the move has also split the lenders-those with a higher overseas access are chasing foreign currency deposits, while the smaller lenders rely on domestic deposit rate hikes to attract funds.

Earlier, the central bank capped the interest rate banks could offer on foreign currency non-resident (bank) deposits at a global benchmark rate plus 350 basis points (bps). By nixing the cap this month, it has effectively giv...