The Reserve Bank of India’s steps to draw foreign currency inflows have led banks to raise returns on Foreign Currency Non-Resident Bank deposits. Lenders are now offering improved interest rates to attract Non-Resident Indian customers. Ujjivan Small Finance Bank has lifted its rate on U.S. dollar FCNR(B) deposits for the three-to-five-year period to 7.50 percent annually, placing it among the higher-paying institutions. DBS Bank India has adjusted its rates to provide as much as 5.6 percent annually on similar U.S. dollar deposits for the same term, starting July 1, 2026. These changes follow the central bank’s policy to encourage stable foreign currency deposits, which helps bolster India’s foreign exchange reserves and external sector. Ujjivan Small Finance Bank noted that the adjustment aligns with the RBI’s goals and aims to deliver competitive options for NRIs while supporting long-term reserves and stability. DBS Bank India stated that FCNR(B) deposits let NRIs hold funds in foreign currency, removing exchange-rate risk at maturity since both principal and interest are repaid in the original currency. The bank also offers digital account opening from abroad for eligible customers. With global rates still relatively high and the RBI promoting inflows, banks are using FCNR(B) deposits to draw NRI funds, increasing competition and giving overseas Indians additional choices for their savings.
