FCNR(B) Deposit Rates: The Reserve Bank of India opened a special FCNR(B) swap window on 5 June 2026 to bring more foreign currency into the country. The move stays open until 30 September 2026. Under this window, banks can use the RBI swap facility for fresh FCNR(B) deposits that they mobilise for three to five years.
The RBI’s own FAQ says the swap covers only the principal amount and not the interest part, and the bank can use the facility even when the remaining maturity is below three years, as long as the original deposit was for at least three years. Reuters reported that the aim is to support foreign currency inflows and the rupee.
What are FCNR(B) deposits?
FCNR(B) stands for Foreign Currency Non-Resident (Bank) account. It is a term deposit for NRIs that can be opened in approved foreign currencies. RBI rules allow deposits for one to five years, and the scheme has also permitted banks to accept deposits in any freely convertible currency since 2011. The older approved currencies included US dollar, pound sterling, euro, Japanese yen, Canadian dollar and Australian dollar. Interest rules are set by RBI limits, and banks can choose their own rates within those limits.
Why Banks are offering Special Rates
After the RBI’s announcement, several banks quickly introduced higher FCNR(B) rates for three- to five-year deposits. Bank of Baroda said its special scheme started on 11 June 2026 and offered higher rates across USD, GBP, EUR, AUD and CAD deposits.
Its press release showed rates going up to 6.00% for five-year USD deposits. Other banks also revised their rates soon after the RBI move. Some banks have also set a minimum deposit amount of Rs 5 lakh for special offers.
Benefits and Rules
FCNR(B) interest is exempt from Indian income tax, and the money is fully repatriable. That means both the deposit amount and the earned interest can be sent back abroad in the chosen foreign currency.
The account can be opened singly or jointly, and nomination is allowed. Premature withdrawal is allowed after one year, but the interest rate can change and the bank may apply a penalty for early exit. For opening the account, NRIs usually need a passport, visa or work permit, overseas address proof, Indian address proof, proof of Indian origin, job papers such as a contract or payslips, and tax documents such as PAN or Form 60 with FATCA and CRS declaration
Why it still takes time for many NRIs?
Even in the digital age, opening an FCNR(B) account can still move slowly when the customer is abroad. Industry experts say the biggest delay is paper-based checking, not just KYC rules.
Paritosh Desai of IDfy said, “Before a bank can book the deposit, it has to establish identity, confirm residency status, complete KYC and clear regulatory checks. That’s what activates the relationship, and it’s where all the friction lives,” and he added, “The only durable edge is who can activate a compliant account remotely the same day. IFSCA’s video-based CIP for GIFT City, live since July 2025, already proves that fully remote opening is possible for low-risk jurisdictions. Whoever compresses time-to-activate captures the relationship, not just the deposit,” Desai said. The IFSCA record shows a 10 July 2025 consultation paper on video-based customer identification for GIFT City, which is part of that wider push to make remote onboarding easier.
