Bandhan Bank hikes FCNR rates to 7.1% after RBI swap

The move solves two problems for the RBI. It draws foreign currency inflows into the formal system, and it supplies rupee liquidity without an open-market bond purchase. Both channels support the rupee at a time when the currency has been under pressure. For a broader view on the rupee and dollar dynamics, traders can review the forex market analysis.

"We are pleased to introduce this attractive FCNR(B) deposit offering for our NRI customers at a time when they are seeking stability and value in their overseas investments," said Rajinder Kumar Babbar, Bandhan executive director and chief business officer. He said the offering lets NRIs lock in competitive returns for a longer duration while mitigating currency risk.

The RBI's swap facility is open for deposits with a minimum three-year tenor and a maximum of five years. The central bank said it introduced the facility to encourage foreign currency inflows into the domestic banking system and ease pressure on liquidity.