RBI Sees Surge in Foreign-Currency Non-Resident Deposits
The RBI has seen a significant rise in foreign-currency non-resident (bank) or FCNR (B) deposits, reaching $65.4 billion by August 21, 2026.
These deposits are meant for eligible non-residents, including non-resident Indians (NRIs) and eligible persons of Indian origin (PIOs), who can open an FCNR (B) account with an authorized bank.
The key difference between an FCNR (B) deposit and a non-resident external (NRE) deposit is the currency in which the money is held, as FCNR (B) deposits are held in foreign currencies such as dollars, pounds sterling, euros, Japanese yen, Canadian dollars, and Australian dollars.
The interest on FCNR (B) deposits is exempt from Indian income tax for eligible persons under applicable tax provisions, but if withdrawn before one year, no interest is payable. A bank can also impose a penalty for premature withdrawals after one year.