Highest FCNR (B) FD interest rates for NRIs: PNB offers 6.50%, compare SBI, HDFC Bank, ICICI, Axis Bank and Kotak Mahindra Bank rates - Highest FCNR (B) FD interest rates for NRIs

The Indian government's announcement to cover hedging costs on Foreign Currency Non-Resident (FCNR-B) deposits maturing in 3–5 years through September 2026 has revived demand for these instruments among Non-Resident Indians. This subsidy reduces currency risk for NRIs holding foreign-denominated fixed deposits, effectively lowering the cost of capital for Indian banks sourcing overseas deposits.

Punjab National Bank (PNB) is currently offering the highest USD FCNR-B rate at 6.50%, compared to competitors including State Bank of India (SBI), HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank. The rate comparison reflects competitive positioning among India's largest lenders to attract NRI capital inflows, which strengthen foreign exchange reserves and support rupee stability.

This is a routine product disclosure and rate comparison announcement with no material change to banking sector fundamentals or individual bank investment theses. The hedging subsidy is a government policy measure designed to encourage NRI deposits; banks are passing through competitive rates to capture this temporary incentive window.

Sector implication: Indian financial services, particularly deposit-taking banks, benefit modestly from policy-supported NRI capital inflows, but the impact remains procedural rather than catalytic. US-listed Indian bank ADRs show minimal correlation with this domestic deposit market disclosure.