Several banks, including State Bank of India, Punjab National Bank, Bank of Baroda, HDFC and ICICI, have hiked interest rates on Foreign Currency Non-Resident (Bank) or FCNR (B)) deposits for non-resident Indians.

The new interest rates have been introduced within days of the RBI announcing a foreign currency swap window for banks until 30 September. The central bank will absorb the currency hedging cost that banks had to bear on such deposits, thus leaving room for banks to raise deposit rates.

SBI announced a new SBI Advantage FCNR(B) deposit scheme available in USD for a 3-5 year tenure with a lock-in period of 1 year.

Deposits above $1 million for 3-4 years will attract 5.5% interest, while 4-5 years will fetch 5.75% and those with 5 years tenure will earn 6% interest.

Bank of Baroda (BoB) said it is offering higher interest rates for deposits in the 3-to-5-year maturity bucket across major foreign currencies, including the US Dollar (USD), British Pound Sterling (GBP), Euro, Australian Dollar (AUD) and Canadian Dollar (CAD) under the new FCNR (B) deposit scheme.

Customers would earn up to 6% on USD deposits, 4.75% on GBP and AUD deposits, 5.15% on CAD deposits and 3.75% on Euro deposits with effect from 11 June.

PNB on its website said it is offering 6% interest on less than $1 million FCNR (B) deposits with 3-4 years tenure, revised from 11 June. This interest is for USD (earlier 3.24%) and GBP (earlier 2.34%) deposits, while it is 4.50% for Euro (earlier 1.30%).

ICICI Bank, on its website, said it is offering 6.50% interest on NRI fixed deposits effective 11 June.

Private sector HDFC Bank had on Wednesday hiked the FCNR(B) deposit rate for 3 to 5 years tenure to 6% effective 10 June. This will be applicable to deposits booked between 10 June and 30 September 2026.

Kotak Mahindra Bank on its website said that FCNR (B) deposit interest rates, with effect from 11 June, will be 6% for 3-5 year deposits less than USD 1 million, and 6.15% for deposits more than USD 1 million.

AU Small Finance Bank (AU SFB) also hiked FCNR (B) deposit rates, with the peak USD deposit rate increasing from 5.15% to 7.10%, effective 10 June.

Industry experts estimate the RBI’s measures on FCNR (B) deposits and external commercial borrowings (ECBs) by state-owned companies could attract $60-70 billion in foreign capital and support the rupee.