South Indian Bank raises FCNR deposit rate to 6.5 pc after RBI swap window

Mumbai: Private sector lender South Indian Bank on Friday said it has revised the interest rate on US dollar deposits under Foreign Currency Non-Resident (Bank) to 6.5 per cent per annum for tenures of 3-5 years.

The revised rate follows the Reserve Bank of India's (RBI) recent introduction of a USD/INR forex swap facility for fresh FCNR(B) deposits mobilised by banks for tenures of three to five years, the bank said in a statement.

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Under the RBI facility, banks can swap eligible FCNR(B) deposits with the central bank in US dollars, helping them mobilise stable foreign currency resources while managing currency risks more effectively.

The facility is available for eligible FCNR(B) deposits accepted up to September 30, 2026, while the swap window with the RBI will remain open until October 16, 2026.

South Indian Bank said the revised deposit rate offers NRIs an opportunity to earn attractive returns on their foreign currency savings while maintaining protection against exchange rate fluctuations.

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The lender said the RBI's forex swap scheme is expected to support growth in long-term foreign currency deposits across the banking sector and enhance banks' ability to raise overseas funds.