The cuts follow a June 2026 RBI move in which the government agreed to bear hedging costs on 3–5 year FCNR (B) deposits until September 30, 2026, to draw in more dollar inflows.
Banks responded by raising rates on these tenures as high as 6–6.5%, which pulled in unexpectedly large USD deposits.
Because the response was so strong, the government moved the deadline up to August 31, and banks have now rolled back their rates accordingly.
What is an FCNR (B) account?
An FCNR (B) account allows NRIs, OCIs, and PIOs to hold fixed deposits in foreign currency, offering tax-free interest, easy repatriation of funds, and protection from exchange-rate fluctuations.
HDFC Bank
HDFC Bank, which earlier offered up to 6.25% on its 3–5 year deposits, now offers 3.50% on tenures of three to four years and 3.15% on four to five years, effective September 1, 2026.
ICICI Bank
ICICI Bank has cut its rate from 6.25% to a flat 3.25% across the three-to-five-year band, also effective September 1, 2026.
SBI
SBI, which previously offered up to 6% on five-year deposits above $1 million (5.75% for deposits up to $1 million), now offers 3.35% on three-to-four-year deposits, 2.95% on four-to-five-year deposits, and 3.05% on five-year deposits.
PNB
PNB has reduced its top rate from 6.50% to 3.06% on five-year deposits under $1 million, and from 6.40% to 3.25% on three-to-four-year deposits, effective September 1, 2026.
Axis Bank
Axis Bank has cut its rate from 6.25% to 3.25% on three-to-four-year deposits and 2.95% on four-to-five-year deposits for amounts below $1 million, effective September 1, 2026.
Kotak Mahindra Bank
Kotak Mahindra Bank, which earlier offered 6.30% on five-year deposits above $0.5 million, now offers 3.40% on three-to-four-year deposits, 3.20% on four-to-five-year deposits, and 3% on five-year deposits.
