Several major Indian lenders, including State Bank of India and ICICI Bank, introduced on Thursday a fresh wave of Foreign Currency Non-Resident Bank deposit offerings featuring enhanced interest yields for Non-Resident Indians. The sharp upward revision in foreign currency fixed deposit returns follows shortly after the Reserve Bank of India unveiled a special foreign exchange swap window for banks running through September 30. This regulatory measure effectively alleviates the currency hedging expenditure that lenders usually shoulder on such liabilities, thereby opening up substantial headroom for institutions to pass on aggressive deposit rates to depositors overseas.
Anticipated Capital Inflows and Policy Objectives
Relieving lenders of the burden of currency hedging costs on these offshore liabilities has served as the key catalyst behind the competitive rate revisions. Policymakers aim to tap into the substantial savings of the global Indian diaspora to augment foreign capital inflows into the domestic banking network. Market observers project that these competitive deposit schemes could channel roughly 60 billion to 70 billion US dollars in foreign exchange into India, providing significant support to the broader financial framework and foreign exchange stability.
Comparative Breakdown of Bank Deposit Rates
ICICI Bank initiated an attractive interest rate of 6.50 percent per annum on non-resident fixed deposits starting June 11, according to details shared on its official portal, offering depositors a compelling return on their offshore savings.
State Bank of India rolled out a dedicated offering termed SBI Advantage FCNR (B) for US dollar deposits spanning maturities of three to five years. The program comes with a mandatory lock-in duration of one year. According to the institution, funds exceeding 1 million US dollars will fetch an annual interest rate of 5.50 percent for terms lasting three to four years. For deposit durations between four and five years, the rate rises to 5.75 percent, while five-year placements offer a 6 percent return.
Public sector lender Bank of Baroda revised yields upward across tenures of three to five years under its revised FCNR (B) program, covering multiple convertible currencies including the US dollar, British pound, euro, Australian dollar, and Canadian dollar. Under its revised schedule, US dollar deposits offer up to 6 percent, British pound and Australian dollar holdings earn 4.75 percent, Canadian dollar balances provide 5.15 percent, and euro deposits yield 3.75 percent.
Kotak Mahindra Bank announced that beginning June 11, FCNR (B) deposits maintained for three to five years will earn 6 percent on balances below 1 million US dollars. High-value deposits amounting to 1 million US dollars or more qualify for a slightly higher yield of 6.15 percent.
HDFC Bank pushed its FCNR (B) deposit rate to 6 percent for tenures spanning three to five years starting June 10. The lender clarified that this specific pricing structure applies to qualifying deposit accounts opened between June 10 and September 30, 2026.
AU Small Finance Bank implemented an even sharper revision, increasing the peak annual return on US dollar FCNR (B) deposits from 5.15 percent to 7.10 percent. The updated interest framework took effect on June 10, 2026.
Key Drivers Behind FCNR (B) Account Popularity
FCNR (B) accounts serve as a vital mechanism allowing non-resident depositors to preserve foreign currency directly within the Indian banking ecosystem. A paramount attraction of this framework is complete immunity from foreign exchange volatility. Because both the principal amount and the accrued interest are retained and serviced entirely in foreign currency, depositors face zero exposure to fluctuations in the Indian rupee, making it an exceptionally reliable wealth preservation instrument for global savers.
