The revised rates and the new scheme came into effect on June 15.
Under the special FCNR(B) scheme, non-resident Indians (NRIs) can earn 6.5% interest on US dollar deposits with maturities of three years to less than four years, four years to less than five years, and five years. The rate is among the highest currently being offered by Indian banks on FCNR(B) deposits.
The bank has also revised rates on its regular US dollar-denominated FCNR(B) deposits. Deposits with a one-year maturity will earn 5%, while those with maturities between one and two years and between two and three years will earn 4.5% and 3.2%, respectively. Deposits with maturities of three years and above will carry an interest rate of 3.15%.
Interest rates on FCNR(B) deposits in other currencies, including the British pound, euro, Japanese yen, Canadian dollar, Australian dollar, Swiss franc, New Zealand dollar and Singapore dollar, remain unchanged.
The move comes after the Reserve Bank of India (RBI) announced a temporary facility allowing banks to absorb hedging costs on fresh FCNR(B) deposits with maturities of three to five years mobilised between June 8 and September 30.
The measure is aimed at encouraging foreign currency inflows and supporting the rupee amid global uncertainties.
FCNR(B) deposits allow NRIs and Persons of Indian Origin to keep savings in foreign currencies while earning fixed returns in the same currency, insulating depositors from fluctuations in the rupee’s exchange rate. The deposits are also fully repatriable and the interest earned is exempt from tax in India for eligible depositors.
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