PNB, Union Bank revise FCNR(B) deposit rates

Two public sector banks have raised the interest rate on dollar-denominated Foreign Currency Non-Resident – Bank (FCNR-B) deposits by 11-29 basis points across different maturities, effective Wednesday.

Punjab National Bank and Union Bank of India have also revised rates for FCNR-B deposits denominated in the euro, pound, yen, Canadian and Australian dollars.

The revised rate in dollar deposits for two years to less than three years is up 11 bps, to 2.5 per cent yearly. For three to less than four years, PNB is offering 4.12 per cent and UBI 3.87 per cent. For the five-year bucket, the new rate is 5.05 per cent (PNB) and 4.8 per cent (Union Bank).

A senior PNB executive said this was a monthly exercise and not a special effort to attract more money into these deposits.

Through the Reserve Bank’s new swap window, banks have gathered $25 billion from non-resident Indians through FCNR-B deposits. RBI had offered to swap dollars raised through FCNR-B deposits with the rupee at a subvention of 3.5 per cent.