Thanks to the concessional swap window, HDFC bank manages to earn an exceptionally huge amount through FCNR deposits. Between September 4 and November 30, the Reserve Bank of India (RBI) had opened the window so that financial institutions could come up with ways to attract the inflow of dollars in order to help in rupee stabilization.
For a minimum of a year to a 5 year maximum period, Non residents can have a term deposit account called an FCNR account. The amount in this account is in international or foreign currency. Based on the currency and the number of years or term of the deposits, FCNR interest rates are determined.
After the hike of the key policy rate or repo rate by the RBI by 25 bps to 7.75 percent, HDFC banks whose main focus was retail lending had increased the base rate last month to 20 percent, or by 20 bps, the base rate of ICICI bank and SBI is 10 percent.