FCNR(B) scheme closes after strong NRI demand: Why digital onboarding now matters
Under the RBI’s special window, banks can offer NRIs interest rates of 5.5% to 7% on dollar-denominated FCNR(B) deposits, with the facility available until September 30, 2026.
- Sep 26, 2026,
- Updated Sep 26, 2026 7:46 AM IST
The Reserve Bank of India’s special FCNR(B) deposit window has created a sizeable opportunity for banks to deepen their NRI customer base, with commercial banks mobilising $133 billion through the scheme since its launch in June. However, industry experts say banks will need efficient digital onboarding and compliance systems to convert the surge in interest into lasting customer relationships.
The special window allowed banks to offer NRIs higher interest rates of 5.5% to 7% on dollar-denominated FCNR(B) deposits, with the RBI absorbing the associated hedging costs. The facility closed on August 31, 2026, ahead of its original schedule.
ALSO READ: BT Big Story: How the FCNR(B) deluge has created two new problems for the RBI
The scale of mobilisation highlights strong demand for the product. According to an article on the state of the economy published in the RBI’s monthly bulletin, strong FCNR(B) inflows also contributed to surplus liquidity in the banking system. The article noted that the rupee recovered briefly in early September on the back of strong FCNR(B) deposits, before those gains reversed later in the month amid higher crude oil prices and West Asia tensions.
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The RBI bulletin article, authored by RBI staffers under the guidance of Deputy Governor Poonam Gupta, said the rupee had depreciated 0.7% in September and around 5% since the West Asia conflict began in late February. The article also clarified that its observations represented the authors’ views and not the official position of the RBI.
For banks, however, attracting NRI deposits is only the first step. Prasad Patil, CTO & Chief - Business Operations at Mobicule Technologies, told Business Today that operational efficiency would be critical as banks seek to build relationships with customers acquired through the FCNR(B) opportunity.
“Rate alone doesn't decide this,” Patil said, pointing to the growing importance of onboarding experience alongside pricing. According to Fenergo research cited by Patil, 70% of financial institutions lost clients in 2025 due to slow onboarding, compared with 48% in 2023.
NRI customers often complete account-opening processes remotely, making delays in identity verification, document validation, KYC and AML checks particularly significant. Patil said AI adoption in KYC and AML across the industry had increased from 42% in 2024 to 82% in 2025, although much of the adoption remained partial.
Digital KYC, automated document verification and workflow orchestration can help banks process larger volumes while maintaining compliance controls. Patil said automated verification could reduce processing time by around 78% compared with manual review, while some institutions had cut KYC/AML review times by up to 60%.
The FCNR(B) window has therefore demonstrated the scale of potential NRI demand, while also highlighting the operational challenge for banks. With the special window now closed, banks will need to focus on retaining customers acquired during the period and converting deposit relationships into broader, long-term NRI banking relationships.
DO READ: ₹5 lakh crore profit, not loss? SBI Research’s case for FCNR(B) scheme explained
The Reserve Bank of India’s special FCNR(B) deposit window has created a sizeable opportunity for banks to deepen their NRI customer base, with commercial banks mobilising $133 billion through the scheme since its launch in June. However, industry experts say banks will need efficient digital onboarding and compliance systems to convert the surge in interest into lasting customer relationships.
The special window allowed banks to offer NRIs higher interest rates of 5.5% to 7% on dollar-denominated FCNR(B) deposits, with the RBI absorbing the associated hedging costs. The facility closed on August 31, 2026, ahead of its original schedule.
ALSO READ: BT Big Story: How the FCNR(B) deluge has created two new problems for the RBI
The scale of mobilisation highlights strong demand for the product. According to an article on the state of the economy published in the RBI’s monthly bulletin, strong FCNR(B) inflows also contributed to surplus liquidity in the banking system. The article noted that the rupee recovered briefly in early September on the back of strong FCNR(B) deposits, before those gains reversed later in the month amid higher crude oil prices and West Asia tensions.
MUST READ: SEBI allows PMS exposure to foreign securities: What products can clients access?
The RBI bulletin article, authored by RBI staffers under the guidance of Deputy Governor Poonam Gupta, said the rupee had depreciated 0.7% in September and around 5% since the West Asia conflict began in late February. The article also clarified that its observations represented the authors’ views and not the official position of the RBI.
For banks, however, attracting NRI deposits is only the first step. Prasad Patil, CTO & Chief - Business Operations at Mobicule Technologies, told Business Today that operational efficiency would be critical as banks seek to build relationships with customers acquired through the FCNR(B) opportunity.
“Rate alone doesn't decide this,” Patil said, pointing to the growing importance of onboarding experience alongside pricing. According to Fenergo research cited by Patil, 70% of financial institutions lost clients in 2025 due to slow onboarding, compared with 48% in 2023.
NRI customers often complete account-opening processes remotely, making delays in identity verification, document validation, KYC and AML checks particularly significant. Patil said AI adoption in KYC and AML across the industry had increased from 42% in 2024 to 82% in 2025, although much of the adoption remained partial.
Digital KYC, automated document verification and workflow orchestration can help banks process larger volumes while maintaining compliance controls. Patil said automated verification could reduce processing time by around 78% compared with manual review, while some institutions had cut KYC/AML review times by up to 60%.
The FCNR(B) window has therefore demonstrated the scale of potential NRI demand, while also highlighting the operational challenge for banks. With the special window now closed, banks will need to focus on retaining customers acquired during the period and converting deposit relationships into broader, long-term NRI banking relationships.
DO READ: ₹5 lakh crore profit, not loss? SBI Research’s case for FCNR(B) scheme explained