Interest in Foreign Currency Non-Resident (FCNR) deposits has surged following an RBI concessional swap facility, attracting over USD 17.4 billion. Canara Bank offers the highest 3-year FCNR(B) USD fixed deposit rate at 6.50%, with other major Indian banks also providing competitive rates for NRIs, OCIs, and PIOs.
HSBC Bank's IFSC unit in GIFT City offers Non-Resident Indians up to 19x leverage on FCNR(B) deposits, enabling significantly amplified returns. While this strategy can boost profits, experts warn of substantial risks if borrowing costs, particularly SOFR, exceed deposit interest rates. FCNR(B) deposits also provide protection against Indian Rupee depreciation.
Non-resident Indians (NRIs) and OCIs can choose between FCNR(B) and NRE fixed deposits for reliable returns. FCNR(B) offers currency protection in foreign denominations, while NRE is in Indian rupees. Both are tax-exempt and fully repatriable, with the choice depending on currency expectations and financial goals.
The Reserve Bank of India has revamped its FCNR(B) scheme to attract foreign capital, allowing Indian banks to route overseas deposits and removing currency/credit risks for lenders. This aims to boost NRI deposits by offering attractive fixed rates.
Indian banks are asking the RBI for permission to let their overseas branches lend to non-residents for FCNR(B) deposits. Some banks, like SBI, already offer structured products where deposits collateralize loans, seeking regulatory comfort before a special RBI window closes in September.
Indian banks are asking the RBI for guidance on allowing overseas branches to lend to non-residents for FCNR(B) deposits. Some banks, like SBI, already offer structured products where deposits collateralize loans, aiming to boost NRI deposits before a special RBI window closes in September.
The Reserve Bank of India has temporarily removed interest rate restrictions on NRE and FCNR(B) deposits until September 30, 2026, to attract foreign currency inflows. This allows banks to offer higher rates on these deposits for Non-Resident Indians.
Several Indian banks, including Canara Bank, Federal Bank, Bank of Baroda, and IOB, have introduced FCNR(B) schemes offering attractive interest rates up to 6.50% on US dollar deposits. These schemes, effective from June 2026, aim to boost foreign currency inflows and offer tax benefits to Non-Resident Indians.
The Indian government is covering hedging costs for FCNR(B) deposits until Sept 2026, allowing banks to offer over 7% interest. This enables NRIs to use a rate arbitrage strategy, borrowing against deposits to reinvest and potentially earn significant returns, though risks like fluctuating borrowing costs and foreign taxes remain.
State Bank of India (SBI) has updated its FCNR(B) deposit interest rates, offering up to 6% per annum on US dollar-denominated accounts. This revision follows the Reserve Bank of India's decision to bear hedging costs for new deposits maturing between three to five years until September 30, 2026.
The Reserve Bank of India (RBI) deputy governor urged bank CEOs to increase efforts in mobilizing overseas funds through FCNR(B) deposits to boost dollar inflows and strengthen forex reserves. This push comes with new RBI incentives to support these deposits, aiming to stabilize the rupee which depreciated significantly last fiscal year.
Indian banks have revised FCNR(B) deposit interest rates following a government decision to cover hedging costs for 3-5 year deposits, benefiting Non-Resident Indians. Central Bank of India offers 6% on these deposits.
