FCNR(B) Swap Ends: Is Your NRI Deposit Locked In?

RBI is closing its concessional swap facility for FCNR(B) deposits one month early — by August 31. NRIs who want better rates on USD or GBP deposits in India need to act before the window shuts.

Here's what happened: RBI has decided to wind down its concessional swap facility for FCNR(B) deposits, with the revised deadline now set at August 31 instead of September 30.. The facility, which reduced the cost for banks to hedge foreign currency deposits, had successfully attracted strong NRI inflows into the FCNR(B) scheme.. Only deposits with a maturity of 3 to 5 years mobilised on or before August 31 will be eligible for the concessional swap rate going forward..

What you should do: Check with your NRI family member's bank immediately — confirm whether their planned FCNR(B) deposit can be processed before August 31 to lock in current rates.. Compare current FCNR(B) interest rates across SBI, HDFC Bank, and ICICI Bank right now — rates differ by up to 0.5% and the best window closes soon.. Avoid waiting until late August — bank processing and documentation for NRI accounts often takes 7-10 business days, so initiate the deposit this week..

FCNR(B) interest is completely tax-free in India for NRIs during their non-resident status — no TDS deducted, making the effective yield significantly higher than a comparable resident FD.