India’s top financial banking services providers — State Bank of India (SBI), Bank of India (BoI), and Yes Bank — have sharply raised interest rates on Foreign Currency Non-Resident (Bank) or FCNR(B) deposits following the Reserve Bank of India’s recent measures to attract foreign currency inflows, with lenders now offering Non-Resident Indians (NRIs) returns of up to 6.6 per cent on US dollar deposits.
The banks have revised their FCNR(B) deposit rates, a significant increase from earlier levels of around 3.35 per cent on long-term US dollar deposits.
The country’s largest lender, SBI, has launched its FCNR(B) Advantage Deposit Scheme, under which deposits of up to $1 million will earn 5.25 per cent for tenures of three years to less than four years, 5.50 per cent for four years to less than five years and 5.75 per cent for five years.
For deposits above $1 million, SBI is offering up to 6 per cent interest for a five-year tenure.
According to SBI, premature withdrawal is not permitted during the first year of FCNR(B) deposits under the new scheme. Withdrawals after one year but before three years will earn 3.50 per cent interest for the period the deposit remained with the bank.
Similarly, Bank of Baroda has revised FCNR(B) rates across major foreign currencies, including the US dollar, British pound sterling, euro, Australian dollar and Canadian dollar.
Under the scheme, customers can earn up to 6 per cent on US dollar deposits, 4.75 per cent on pound sterling and Australian dollar deposits, 5.15 per cent on Canadian dollar deposits and 3.75 per cent on euro deposits.
Bank of Baroda Executive Director Beena Vaheed said the RBI’s recent measures have created an enabling environment for banks to strengthen their FCNR(B) offerings for the NRI community.
“The move is a well-calibrated and multi-pronged measure aimed at attracting FCNR(B) deposits and strengthening the Indian rupee,” she said.
Meanwhile, Yes Bank has announced the highest FCNR(B) rates among major lenders, offering up to 6.60 per cent annually on US dollar deposits.
Under the revised structure, effective Thursday, deposits with tenures of three years to less than four years will earn 6.50 per cent, four years to less than five years will earn 6.55 per cent, while five-year deposits will fetch 6.60 per cent.
Notably, the central bank recently eased regulations relating to FCNR(B) deposits and overseas borrowings, allowing banks greater flexibility to mobilise foreign currency funds from NRIs.
The revised rates are expected to help banks attract higher foreign currency deposits from NRIs while supporting the country’s external financing position and strengthening foreign exchange inflows.
