Axis Bank Hikes FCNR(B) Rate to 6.40% for Large Deposits

Axis Bank, India’s third-largest private sector lender, has raised its interest rate on Foreign Currency Non-Resident (Bank) or FCNR(B) deposits exceeding $1 million to 6.40 percent. This new rate applies to a three-to-five-year tenor and is effective from August 17, 2026.

This adjustment positions Axis Bank as the first among large banks to offer the highest rate in this category, surpassing its previous offering of 6.25 percent. The decision follows the Reserve Bank of India (RBI) truncating the concessional swap window for FCNR(B) deposits.

Understanding FCNR(B) Deposits and the RBI Move

FCNR(B) deposits are foreign currency non-resident bank deposits. The RBI’s action to shorten the concessional swap window by a month has prompted banks to intensify their efforts to attract these deposits.

This regulatory change creates a competitive environment as banks aim to mobilise foreign currency before the window closes. Attracting these deposits is crucial for banks, especially with the reduced time frame for concessional swaps.

Competitive Landscape and Mobilization Figures

Currently, other major banks are offering slightly lower rates. Competitors like HDFC Bank and ICICI Bank are providing 6.25 percent on similar FCNR(B) deposits, while State Bank of India (SBI) offers 6 percent for deposits exceeding $1 million over a five-year tenor.

Analysts and bankers widely anticipate that more banks will follow Axis Bank’s lead. They expect further rate increases across the sector over the next two weeks as the deadline for the swap window approaches.

Significant funds have already been mobilised under the scheme, with over $52 billion collected as of August 13. Total mobilisation is projected to reach between $60 billion and $70 billion by the end of August.

Specifically, Axis Bank alone had mobilised nearly $1.59 billion in net FCNR(B) deposits by July 31, according to government data. This indicates their active participation in securing foreign currency funding.

The current competitive environment underscores the banking sector’s strategic push to attract foreign currency. This drive is largely influenced by the regulatory adjustments implemented by the RBI.