SBI Alters FCNR(B) Deposit Interest Rates After RBI's Special Swap Window

After India's central bank decided to bear hedging costs for new Foreign Currency Non-Resident (Bank), or FCNR(B), deposits with maturities of three to five years until September 30, the State Bank of India (SBI) has revised its FCNR(B) deposit interest rates, joining several public and private lenders, who have recently raised returns to attract NRI inflows.

As part of the new rates, effective June 15, SBI is now offering up to 4.40% on US dollar-denominated FCNR(B) deposits with maturities of one year and above one year to less than two years, while rates for the three to five year bucket range between 2.95% and 3.35%.

When it comes to other currencies, SBI is offering up to 4.25% on Australian dollar deposits, 4% on British pound deposits, 3.01% on Canadian dollar deposits, 2.75% on euro deposits and 0.40% on Japanese yen deposits, depending on the tenor.

This comes after the RBI unveiled a special FCNR(B) swap facility and exempted incremental FCNR(B) deposits mobilised between July 1, 2026 and September 30, 2026 from cash reserve ratio (CRR) and statutory liquidity ratio (SLR) requirements.

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The measures are aimed at ensuring banks mobilise foreign currency deposits and strengthen external sector buffers.

An increase in FCNR(B) deposit rates by Indian banks has been noted. Private sector banks such as Axis Bank have raised dollar deposit rates to 6% across the three to five-year maturity bucket, while Kotak Mahindra Bank is offering up to 6.15% for larger-ticket deposits.

YES Bank has elevated rates to 6.60%, and CSB Bank has hiked its peak USD FCNR(B) rate to 7.05% for five-year deposits.

Public sector banks have also followed suit. Bank of Baroda launched a special FCNR(B) deposit scheme offering up to 6% on five-year US dollar deposits.