RBI Covers Hedging Cost: Is Your NRI FD Earning More?

RBI is paying the currency hedging cost on new FCNR-B deposits until September 2026 to attract more foreign currency into India. If your family abroad has idle foreign savings, this could be the best time to open one.

Here's what happened: RBI announced it will absorb hedging costs on fresh FCNR-B deposits opened by NRIs, a move last used during the 2013 rupee crisis to stabilise India's forex reserves.. NRO accounts — where NRIs park India-earned income like rent or dividends — are now the fastest-growing NRI deposit segment, outpacing FCNR-B and NRE accounts.. The hedging cost waiver is valid only on new FCNR-B deposits created until September 2026, meaning early movers get the full benefit of the incentive window..

What you should do: Call your NRI family member (parent, sibling, spouse abroad) and ask if they have idle USD, GBP, or EUR savings that could go into a fresh FCNR-B deposit before September 2026.. Compare current FCNR-B interest rates across SBI, HDFC Bank, and ICICI Bank — rates differ by currency and tenure, and even a 0.25% difference matters on large forex amounts.. If your NRI relative earns rent or dividends in India, check whether their NRO account is earning a competitive interest rate — most banks offer 3–7% on NRO FDs and tax is deductible at source..

FCNR-B deposits are fully repatriable and exempt from Indian income tax — making them more tax-efficient than NRE FDs for NRIs who plan to move money back abroad later.