FCNR (B) FD interest rates up to 6.50%: SBI, HDFC Bank, PNB and others- which bank offers highest rate?

Indian banks including Punjab National Bank, HDFC Bank, and ICICI Bank have raised FCNR(B) deposit rates to compete for non-resident Indian capital inflows. PNB now leads with 6.50% on five-year tenures, reflecting broader interest rate environment adjustments in the Indian banking sector.

FCNR(B) deposits—foreign currency non-resident accounts—represent a distinct funding channel for domestic banks seeking stable dollar and foreign-denominated liabilities. Rate increases across three- to five-year maturities signal banks' appetite to lock in longer-duration NRI deposits amid potentially volatile capital flows and rupee dynamics.

This competitive rate environment indicates deposit cost inflation within Indian banking, which may compress net interest margins if loan yield growth lags. The moves are tactical responses to maintain NRI deposit inflows rather than systemic market catalysts, affecting primarily the Indian financial services landscape with minimal spillover to broader equity indices.

Sector implication: Indian bank profitability faces near-term margin pressure from rising deposit costs, though rates remain manageable. This is routine competitive positioning with low correlation to US or global equity markets, making it a domestic financial services story rather than a material macro driver.