Leading Indian banks have aggressively hiked interest rates on Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits by up to 310 basis points, capitalizing on recent regulatory relaxations to attract foreign currency inflows. The revised interest rates, which take effect today, June 11, see major private and public sector lenders offering yields as high as 6 percent on foreign deposits, primarily targeting a maturity bucket of three to five years.
ICICI Bank and Axis Bank, the country’s second and third-largest private sector lenders, have raised their rates by 310 and 305 basis points, respectively. Both institutions are now offering a uniform 6 percent interest rate on US dollar FCNR(B) deposits across all maturities ranging between three and five years. Concurrently, Kotak Mahindra Bank has pushed its yields even higher, offering up to 6.15 percent for deposits exceeding 1 million US dollars within the same maturity bracket.
State-owned Bank of Baroda has also joined the aggressive race by launching a specialized FCNR(B) deposit scheme. This multi-currency initiative offers competitive returns across several major global currencies, allowing non-resident Indians to earn up to 6 percent on US Dollars, 5.15 percent on Canadian Dollars, 4.75 percent on British Pounds and Australian Dollars, and 3.75 percent on Euros. Bank of Baroda officials highlighted that these well-calibrated measures follow the Reserve Bank of India’s strategic directives to encourage foreign fund inflows. By making FCNR(B) offerings significantly more lucrative for the global NRI community, Indian banks aim to aggressively fortify the nation’s foreign exchange reserves and strengthen the Indian Rupee against global macroeconomic volatility.
