Updated 19 June 2026 7:32 AM
SBI Adjusts FCNR(B) Deposit Rates Amid RBI Policy Shifts
State Bank of India (SBI) has revised its Foreign Currency Non-Resident (Bank) deposit interest rates, effective June 15, 2026. The changes align with the Reserve Bank of India’s (RBI) recent decision to absorb hedging costs for FCNR(B) deposits with maturities of three to five years until September 30, 2026.
For USD-denominated deposits, SBI now offers up to 4.40% annual interest for maturities ranging from one year to less than two years. For the three to five-year bucket, rates range between 2.95% and 3.35%. These adjustments follow similar rate hikes by other public and private banks aiming to attract non-resident Indian (NRI) investments.
In addition to USD, SBI has updated rates for other currencies. Australian dollar deposits now offer up to 4.25%, while euro and pound sterling rates remain competitive. These changes reflect broader efforts to stabilize NRI inflows amid global economic uncertainties.
Why This Matters for NRIs
FCNR(B) deposits are a key financial instrument for NRIs, allowing them to park funds in Indian banks without currency conversion risks. The revised rates could influence NRI investment decisions, particularly as global interest rates fluctuate.
RBI’s move to bear hedging costs for longer-term deposits reduces the burden on banks, enabling them to offer more attractive returns. This policy shift may encourage more NRIs to invest in Indian financial instruments, boosting foreign exchange reserves.
Impact on the Banking Sector
The SBI rate revision is part of a trend among major banks. Institutions like HDFC Bank and ICICI Bank have also adjusted their FCNR(B) rates in recent months. This collective action suggests a coordinated effort to maintain liquidity and attract foreign capital.
Banks are leveraging the RBI’s policy to enhance returns for depositors. However, the long-term sustainability of these rates depends on global market conditions and domestic economic stability.
What This Means for the Economy
Increased NRI deposits can strengthen India’s foreign exchange reserves, providing a buffer against external shocks. Higher returns on FCNR(B) deposits may also encourage more NRIs to invest in Indian assets, supporting economic growth.
However, experts caution that prolonged reliance on RBI’s hedging support could create dependency. Banks must balance short-term gains with long-term financial health to avoid potential risks.
Key Takeaways
- SBI offers up to 4.40% on USD FCNR(B) deposits with one to two-year maturities.
- RBI’s hedging cost support applies to three to five-year deposits until September 30, 2026.
- Other banks have followed suit, raising FCNR(B) rates to attract NRI investments.
- Higher returns may boost NRI inflows but require careful monitoring of global and domestic factors.
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