FCNR(B) window may save banks Rs 4,000 crore (opens original article in a new tab)

Banks may save ₹4,000 crore annually by using FCNR(B) deposits due to lower interest rates and RBI's hedging cost coverage, with potential inflows of $35-45 billion.

• Banks could save ₹4,000 crore annually by using FCNR(B) deposits instead of term deposits due to lower interest rates and hedging cost coverage by RBI.
• FCNR(B) deposits offer a 6% interest rate compared to 6.3-7.1% for fixed deposits, creating a 1 percentage point funding cost advantage.
• RBI's FCNR(B) scheme allows banks to swap foreign currency into rupees with hedging costs borne by RBI and exempts deposits from CRR and SLR requirements.