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Major Banks Cut FCNR Deposit Rates After Subsidy Ends

Some Indian banks offer special fixed deposits for people living outside India.

These deposits let customers keep their money in foreign currencies such as dollars.

The government temporarily helped banks pay certain currency-protection costs.

This allowed banks to offer unusually high interest rates, sometimes above 6%.

Many people deposited more dollars than expected.

Because the response was strong, the government ended the support on August 31, 2026, earlier than planned.

The banks then lowered their interest rates from September 1.

The new rates are mostly around 3%, although the exact rate depends on the bank and deposit period.

Key facts

Affected deposits: FCNR (B) foreign-currency fixed deposits with three- to five-year tenures.
Eligible customers: Non-resident Indians, overseas citizens of India, and persons of Indian origin.
Subsidy period: The government hedging-cost support was initially scheduled through September 30, 2026, but ended on August 31.
Earlier high rates: Banks had raised some supported-tenure rates to between 6% and 6.5%.
HDFC Bank revised rates: 3.50% for three to four years and 3.15% for four to five years.
ICICI Bank revised rate: 3.25% across the three- to five-year band.
Rate range after cuts: The listed revised rates range from 2.95% to 3.50%, depending on the bank, tenure, and deposit amount.

CNBC TV 18 · 2 hrs ago