Under the scheme, the bank is offering interest rates of 6% on US dollar deposits with maturities of three years to less than four years, 6.1% for four years to less than five years, and 6.25% for five-year deposits.
For other foreign currencies, the bank is offering up to 4.75% on British pound sterling and Australian dollar deposits, 5.15% on Canadian dollar deposits and 3.75% on euro deposits for five-year tenures.
The launch comes as Indian banks roll out special FCNR(B) deposit schemes following recent measures announced by the Reserve Bank of India (RBI) to encourage foreign currency inflows and support the rupee.
The RBI has allowed banks to absorb the hedging costs on fresh FCNR(B) deposits of three to five years mobilised between June 8 and September 30, enabling lenders to offer more competitive rates on foreign currency deposits.
FCNR(B) deposits allow NRIs to maintain deposits in designated foreign currencies without taking on rupee exchange-rate risk, as both the principal and interest remain denominated in foreign currency. The deposits are fully repatriable and the interest earned is exempt from tax in India for eligible depositors.
Bank of Baroda said customers under the scheme can also avail themselves of overdraft and loan facilities against FCNR(B) deposits, providing additional liquidity while retaining their investments.
Additionally, Canara Bank also launched a special Foreign Currency Non-Resident (Bank) [FCNR(B)] deposit scheme for non-resident Indians (NRIs), offering interest rates of up to 6.5% per annum on US dollar deposits.
The special deposit scheme is available for tenures ranging from three to five years and carries a one-year lock-in period.
A broad-based increase in FCNR(B) deposit rates has been seen across Indian lenders in recent days. Private sector lenders including ICICI Bank and 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 raised rates to as high as 6.60%, and CSB Bank has hiked its peak USD FCNR(B) rate to 7.05% for five-year deposits.
