Leading the latest revisions, CSB Bank has significantly hiked its USD FCNR(B) deposit rates by nearly 300 basis points, taking the peak rate to 7.05% for five-year deposits, compared with 4.00–4.05% earlier.
The revised structure offers 6.95% for 3–4 years, 7.00% for 4–5 years, and 7.05% for 5-year tenors.
Commenting on the move, Pralay Mondal, MD & CEO, CSB Bank, said the FCNR deposit swap facility has come at the right time, as rising money market and bulk deposit rates are narrowing spreads between domestic and foreign currency deposits.
He added that FCNR inflows help ease pressure on short-term rates, support rupee stability through higher foreign currency inflows, and improve banks’ liquidity coverage ratios.
The repricing comes alongside similar moves by large private lenders.
ICICI Bank and Axis Bank have raised FCNR(B) rates by up to 310 basis points and 305 basis points respectively, offering a uniform 6% interest rate on dollar deposits across maturities of three to five years.
Meanwhile, Kotak Mahindra Bank has also revised FCNR(B) rates, offering up to 6.15% for dollar deposits above $1 million in the 3–5 year bucket, and 6% for deposits below that threshold.
Earlier in the day, YES BANK revised interest rates on its US dollar-denominated Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, with the peak rate now going up to 6.60% per annum for five-year tenors.
The revision covers deposits in the 3 to 5-year maturity bucket and is aimed at strengthening the bank’s NRI banking franchise by offering higher returns on foreign currency savings.
Bank of Baroda also launched a special FCNR(B) deposit scheme for NRIs offering higher interest rates across major foreign currencies, including up to 6% on US dollar deposits with five-year maturity. It also introduced differentiated rates across currencies such as GBP, CAD, AUD and EUR.
Other banks, including HDFC Bank, Punjab National Bank, Central Bank of India, Karur Vysya Bank and AU Small Finance Bank, have also revised FCNR(B) dollar deposit rates in recent weeks, particularly in the 3–5 year maturity segment.
