RBI is offering NRIs up to 7% on dollar deposits under FCNR(B). What is an FCNR (B) Fixed Deposit account?
On June 5, 2026, RBI Governor Sanjay Malhotra delivered the Monetary Policy Committee's policy statement. Among the several liquidity and monetary measures announced, one stood out for its potential to attract significant foreign currency inflows into India: the introduction of a US Dollar-Rupee swap facility for fresh Foreign Currency Non-Resident (Bank) — commonly known as FCNR(B) — dollar deposits mobilised for a minimum tenor of three years and maximum tenor of five years.
The RBI has rolled out a special window aimed at attracting more foreign currency deposits from NRIs, a move that could help strengthen the country's foreign exchange reserves and boost overseas capital inflows.
Under fresh guidelines issued on June 8, authorised dealer banks can access an RBI swap facility for new and renewed Foreign Currency Non-Resident (Bank), or FCNR(B), deposits with maturities ranging from three to five years. The RBI's swap facility will be available only in US dollars.
The facility, available from June 8 to September 30, allows banks to swap US dollar deposits with the central bank, helping them manage currency risks while offering competitive returns to NRI depositors. The fresh FCNR(B) dollar deposits mobilised between June 8 and September 30, 2026 are exempt from the mandatory maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) on such deposit amounts.
The last time RBI ran a scheme like this was 2013, when a currency crisis forced Governor Raghuram Rajan to use the same playbook. That window raised $34 billion from the NRI community in weeks. The rupee stabilised. RBI's reserves grew. However, the governor had said, “There was one idea that I found completely idiotic. I thought this was a terrible, terrible thing to do.” In 2013, the RBI provided a 3.5% subsidy to banks. Now, it will fully bear the exchange rate risk on new three- to five-year deposits mobilised until September 30.
What are FCNR(B) deposits?
— FCNR(B) deposits are fixed-term bank deposits that can be opened in India by NRIs, Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs). These deposits allow overseas Indians to maintain their savings in designated foreign currencies such as the US dollar, pound sterling, euro, Japanese yen, Australian dollar, and Canadian dollar, rather than converting their funds into Indian rupees.
You deposit dollars, you receive dollars back at maturity. There is no rupee conversion, so there is no rupee depreciation risk. Interest accrues in the same currency.
— Interest earned on FCNR(B) deposits is exempt from income tax in India as long as the depositor qualifies as a non-resident under Indian tax laws.
— Under the current framework RBI has allowed banks to offer rates linked to internationally accepted benchmark rates, which can go up to 7%.
— There is no restriction on the amount of money that can be deposited in your FCNR (B) accounts.
— As per the prevailing Foreign Exchange Management Act (FEMA) regulations, banks are allowed to accept FCNR (B) deposits in any currency which is freely convertible.