State Bank of India (SBI), Bank of Baroda, and Yes Bank have sharply revised upward their interest rates on Foreign Currency Non-Resident (Bank) — or FCNR(B) — deposits, offering Non-Resident Indians (NRIs) returns of up to 6.6 per cent annually on US dollar deposits. The revisions, effective 11 June 2025, follow the Reserve Bank of India's (RBI) recent regulatory easing on FCNR(B) deposits and overseas borrowings, designed to strengthen foreign currency inflows and support the Indian rupee.

Rate Revisions at a Glance

SBI, the country's largest lender, has launched a dedicated FCNR(B) Advantage Deposit Scheme. Under the scheme, deposits of up to $1 million earn 5.25 per cent for tenures of three years to less than four years, 5.50 per cent for four to less than five years, and 5.75 per cent for a full five-year tenure. Deposits exceeding $1 million can earn up to 6 per cent for a five-year term.

Yes Bank has announced the highest FCNR(B) rates among major lenders, offering 6.50 per cent for three to less than four years, 6.55 per cent for four to less than five years, and 6.60 per cent for a five-year deposit — all on US dollar holdings.

Bank of Baroda has also revised rates across multiple currencies. NRIs can earn up to 6 per cent on US dollar deposits, 4.75 per cent on British pound sterling and Australian dollar deposits, 5.15 per cent on Canadian dollar deposits, and 3.75 per cent on euro deposits.

The RBI Policy Backdrop

These revisions mark a substantial jump from earlier long-term US dollar deposit rates of around 3.35 per cent — nearly doubling the return for NRI depositors in some cases. The RBI recently eased regulations on FCNR(B) deposits and overseas borrowings, granting banks greater flexibility to mobilise foreign currency funds from the diaspora. The move is widely seen as a targeted effort to bolster India's external financing position amid global currency pressures.

Bank of Baroda Executive Director Beena Vaheed described the development as 'a well-calibrated and multi-pronged measure aimed at attracting FCNR(B) deposits and strengthening the Indian rupee.' She added that 'the RBI's recent measures have created an enabling environment for banks to strengthen their FCNR(B) offerings for the NRI community.'

Key Conditions and Restrictions

Under SBI's new scheme, premature withdrawal is not permitted during the first year. Withdrawals made after one year but before three years will earn a reduced rate of 3.50 per cent for the period the deposit remained with the bank. These conditions are specific to SBI's Advantage Deposit Scheme and may differ across lenders.

Impact on NRIs and India's Forex Position

The revised rates are expected to incentivise higher FCNR(B) inflows from the Indian diaspora, which historically responds strongly to rate differentials between India and global deposit markets. This is particularly relevant at a time when US interest rates remain elevated, making competitive Indian FCNR(B) rates a meaningful draw. Analysts note that a sustained uptick in FCNR(B) deposits would support India's foreign exchange reserves and ease pressure on the rupee. The last major wave of FCNR(B) mobilisation occurred in 2013, when the RBI used similar tools to stabilise the currency during a period of sharp depreciation.

With three of India's largest banks now in the race to attract NRI deposits, further rate revisions from other lenders are likely in the coming weeks.