Banks cut FCNR rates on 3-5-year deposits

Several major Indian banks have reduced their FCNR (B) deposit interest rates following the termination of the government's special swap window offer on August 31, 2026. The most significant rate cuts have been made on 3-5 year FCNR (B) deposits, which used to enjoy higher interest rates after the RBI announced relief on hedging costs in June 2026.

The RBI had initially offered to bear the hedging cost on these deposits till September 30, 2026, but after the relief ended, banks increased interest rates on 3 and 5-year FCNR (B) fixed deposits. Consequently, banks have started cutting interest rates on these fixed deposits, leading to an advance in the deadline for the special benefit to August 31, 2026.