Mumbai — Major Indian banks have raised interest rates on Foreign Currency Non-Resident Bank deposits after recent Reserve Bank of India measures aimed at attracting foreign currency inflows, with some lenders now offering NRIs returns of up to 6.6 percent on U.S. dollar deposits.
State Bank of India, Bank of Baroda and Yes Bank have revised their FCNR(B) deposit rates, marking a sharp increase from earlier levels of about 3.35 percent on long-term U.S. dollar deposits.
SBI, the country’s largest lender, has launched its FCNR(B) Advantage Deposit Scheme. Under the plan, deposits of up to $1 million will earn 5.25 percent for tenures of three years to less than four years, 5.50 percent for four years to less than five years and 5.75 percent for five years.
For deposits above $1 million, SBI is offering up to 6 percent interest for a five-year tenure.
According to SBI, premature withdrawal will not be allowed during the first year of FCNR(B) deposits under the new scheme. Withdrawals after one year but before three years will earn 3.50 percent interest for the period the deposit remained with the bank.
Bank of Baroda has also revised FCNR(B) rates across major foreign currencies, including the U.S. dollar, British pound sterling, euro, Australian dollar and Canadian dollar.
Under the revised rates, customers can earn up to 6 percent on U.S. dollar deposits, 4.75 percent on pound sterling and Australian dollar deposits, 5.15 percent on Canadian dollar deposits and 3.75 percent on euro deposits.
Bank of Baroda Executive Director Beena Vaheed said the RBI’s recent steps have created an enabling environment for banks to strengthen FCNR(B) offerings for the NRI community.
“The move is a well-calibrated and multi-pronged measure aimed at attracting FCNR(B) deposits and strengthening the Indian rupee,” she said.
Yes Bank has announced the highest FCNR(B) rates among major lenders, offering up to 6.60 percent annually on U.S. dollar deposits.
Under its revised structure, effective Thursday, deposits with tenures of three years to less than four years will earn 6.50 percent. Deposits of four years to less than five years will earn 6.55 percent, while five-year deposits will fetch 6.60 percent.
The RBI recently eased regulations related to FCNR(B) deposits and overseas borrowings, giving banks more flexibility to mobilize foreign currency funds from NRIs.
The higher rates are expected to help banks attract more foreign currency deposits from NRIs while supporting India’s external financing position and strengthening foreign exchange inflows. (Source: IANS)
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