RBI Covers FCNR Hedging: Is Your NRI Deposit Better?

RBI is covering currency hedging costs on new FCNR-B deposits until September 2026 to pull more foreign money into India. If you are an NRI or have family abroad, here is what this means for where you park your rupees.

Here's what happened: RBI announced it will absorb hedging costs on fresh FCNR-B deposits, making them more attractive to NRIs until September 2026.. This revives a strategy last used in 2013 when India faced a rupee crisis and needed a quick inflow of foreign currency.. Meanwhile NRO accounts — which hold India-earned income like rent or dividends — are already the fastest-growing NRI deposit segment..

What you should do: Compare FCNR-B vs NRE vs NRO: if your NRI family member earns abroad and wants rupee-free repatriation, FCNR-B now has lower risk.. Check current FCNR-B rates at SBI, HDFC, and ICICI — banks often offer 0.25–0.50% over standard FD rates during such RBI incentive windows.. If you already hold NRO deposits for India-earned income, review whether moving fresh foreign earnings to FCNR-B makes better tax and return sense..

FCNR-B interest is 100% tax-free in India for NRIs and fully repatriable — NRO interest is taxed at 30% flat, so new FCNR-B terms tip the math further toward FCNR.