Mangalore-based private sector lender Karnataka Bank on Tuesday said it has raised its NRI deposit interest rates by 50 basis points for three years to 10 years with maturity effective from September 2, 2013.

"The revised interest rate for 3 years to 5 years maturity stands increased to 9.5 per cent from 9 per cent earlier," Karnataka Bank said in a filing to Bombay Stock Exchange.

Besides, interest rate for 5 years to 10 years maturity stands raised to 9.25 per cent from 8.75 per cent earlier.

In the backdrop of falling rupee, the Reserve Bank of India has allowed lenders to offer NRIs a better return than and even relaxed reserve requirements on these deposits to attract more foreign inflows in the country. Following the trend, most of the banks have wooed Non-resident Indians with higher rates of interest.