HDFC Bank and ICICI Bank have increased interest rates on foreign currency non-resident bank deposits to up to 6.25%, taking advantage of a Reserve Bank of India support measure designed to attract foreign investments and lower hedging costs.
HDFC Bank and ICICI Bank have lifted interest rates on foreign currency non-resident bank deposits, or FCNR(B) accounts, to as much as 6.25% as lenders move to take advantage of a temporary Reserve Bank of India support measure that cuts their hedging costs. Business Today reported that the higher rates apply to 3-year to 5-year tenures, reflecting a broader push by banks to attract overseas Indian savings while the central bank’s relief is in place until September 30, 2026.
The RBI announced in June that it would bear the hedging cost on fresh FCNR(B) deposits in that maturity band, effectively lowering banks’ funding expenses and making room for richer offers to non-resident Indians and overseas citizens of India. Livemint and The Economic Times both said the policy was designed to draw in foreign currency inflows, with bankers expecting the measure to help banks mobilise large sums of fresh deposits over the coming months.
According to Business Today, HDFC Bank is offering 6.25% on deposits with tenures from 3 years to 5 years, while ICICI Bank has matched that rate for eligible accounts with balances of ₹4 lakh and above. HDFC’s own interest-rate pages, however, showed 6% for certain FCNR tenures as of July 24, suggesting that rates can vary by currency, booking date and the channel used. The bank also said requests submitted through net banking are processed within two working days, and deposits booked between June 10 and September 30 will carry a one-year lock-in.
FCNR(B) deposits allow NRIs to park savings in foreign currencies such as the US dollar, pound sterling and euro, with both principal and interest kept outside rupee exposure. That makes them attractive for savers seeking tax-free interest and protection against currency swings, though fund manager Vishal Goraddia told Business Today they should still be viewed as part of a fixed-income allocation rather than a substitute for long-term equity investing. Data cited by Business Today from a Lok Sabha reply showed HSBC had raised the most under the swap scheme, followed by State Bank of India, ICICI Bank and HDFC Bank, underlining how quickly the policy has already helped banks draw in foreign currency.
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