Ujjivan Small Finance Bank has revised its interest rates on USD FCNR(B) deposits in the 3-5 year tenor to 7.50% per annum, up from the previously offered rate of 7.13% per annum, which was among the highest in the industry. The revision comes after the Reserve Bank of India (RBI) removed the interest rate ceiling on fresh FCNR(B) deposits with maturities of three to five years. As per Business Standard, Hitendra Jha, Head – Retail Liabilities, TASC & TPP at Ujjivan Small Finance Bank, stated that the RBI's move is expected to attract stable foreign currency inflows into the banking system while boosting confidence among NRIs. The bank believes the enhanced rates will encourage greater NRI participation and contribute to sustainable economic growth.
The revisions come after the RBI's policy initiative aimed at encouraging banks to mobilise stable foreign currency deposits, thereby strengthening India's foreign exchange reserves and supporting the country's external sector. As reported by Business Standard, Hitendra Jha from Ujjivan Small Finance Bank emphasized that the RBI's policy initiative was "a significant step towards attracting stable foreign currency inflows into the banking system while reinforcing confidence among Non-Resident Indians." He added that "In alignment with this vision, Ujjivan SFB has enhanced the interest rate on USD FCNR(B) deposits for the three to five-year tenure to 7.5% per annum, making it one of the most competitive rates available in the industry." The bank aims to strengthen NRI participation, mobilise long-term foreign currency deposits, and support the nation's broader objective of sustainable economic growth and external sector resilience.
According to Business Standard, among major lenders, State Bank of India, HDFC Bank, ICICI Bank, and Axis Bank currently offer interest rates of up to 6% on FCNR(B) deposits with maturities ranging from three to five years. Bank of Baroda (BoB) also upped its interest rates on FCNR(B) deposits further by up to 50 bps, offering a peak rate of 6.25% on five-year deposits. Some mid-sized and smaller private-sector banks are offering higher rates than their larger peers. Yes Bank offers up to 6.6% on five-year FCNR(B) deposits, and AU Small Finance Bank is offering a peak rate of 7.1%, while CSB Bank is offering 6.95% for such deposits. Ujjivan SFB's enhanced rate of 7.50% per annum positions it among the most competitive offerings in the market.
According to The Economic Times, FCNR(B) deposits allow NRIs to maintain savings in foreign currency while eliminating exchange-rate risk at maturity, as both the principal and interest are repaid in the designated foreign currency. DBS Bank India highlighted that its DBS Treasures proposition combines banking, wealth management and investment solutions for NRIs, alongside the enhanced FCNR(B) offering. The bank's offering includes fully repatriable deposits with both principal and interest payable in the designated foreign currency, helping reduce exposure to exchange-rate fluctuations. Eligible customers can complete digital onboarding from overseas, enabling them to open accounts and invest in FCNR(B) deposits seamlessly without visiting India. The offering also includes flexible tenures and a mandatory one-year lock-in period during which premature withdrawals are not permitted.
