FCNR(B) Deposit Rates Fall After Swap Window Closes — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- The Indian government advanced the FCNR(B) special swap window deadline from 30 September to 30 August 2026 after heavy US dollar deposit inflows prompted the early closure.
- RBI announced in June that the government would bear hedging costs on eligible deposits, which led banks to raise rates and attract dollar inflows before the window shut.
- Axis Bank now offers 3.25% on 3-4 year deposits and 2.95% on 4-5 year deposits below $1 million, down from a previous 6.25% rate, effective 1 September 2026.
- HDFC Bank revised rates to 3.50% (3 to under 4 years) and 3.15% (4-5 years), while ICICI Bank now offers 3.25% for 3-5 year terms — both down from 6.25%.
- Kotak Mahindra Bank reduced 5-year deposits to 3% from 6.30% (above $0.5 million); Punjab National Bank cut 5-year rates to 3.06% from 6.50%.
- State Bank of India offers 3.35% for 3 to under 4 year deposits and 3.05% for 5-year deposits, down from 6% on 5-year deposits above $1 million.
Why it matters: FCNR(B) rates for 3-5 year deposits have been roughly halved — from around 6.25% to roughly 3-3.5% — effective 1 September 2026. NRI depositors who timed their placements under the special swap window captured the higher rates, while those arriving now face returns nearly half of what was available weeks earlier.
Ask SkimNews
