Nithin Kamath Flags Slow Onboarding As Key Barrier To FCNR Deposit Adoption

FCNR (Foreign Currency Non-Resident) bank deposits are gaining attention among NRIs due to favourable interest rates and currency protection benefits, but structural onboarding delays continue to limit participation, according to Zerodha CEO Nithin Kamath.

FCNR(B) deposits allow non-resident Indians to park funds in fixed deposits denominated in foreign currencies such as US dollars, helping them avoid rupee depreciation risk while earning interest income.

The returns are also tax-free in India, subject to applicable regulations, making the scheme attractive for global investors.

In a series of posts on social media platform X, Kamath highlighted that despite these advantages, the biggest bottleneck remains the onboarding process for NRIs.

He described FCNR deposits as a “no-brainer” investment opportunity, particularly after the Reserve Bank of India (RBI) introduced measures that effectively absorb currency hedging costs, enabling banks to offer competitive interest rates in the range of 6–7% for deposits with maturities of 3–5 years.

However, Kamath pointed out that the real challenge lies in operational delays.

He said account opening and investment onboarding for NRIs can take up to 60 days, which often causes potential investors to lose interest or miss favourable market windows.

“By the time paperwork clears, the opportunity may have passed,” he noted, adding that such delays significantly reduce conversion rates despite strong product attractiveness.

To address this issue, Kamath referred to Rupeeflo, a financial super-app designed for NRIs and Overseas Citizens of India (OCI). The platform aims to streamline onboarding by partnering with leading banks and reducing the account opening process from nearly two months to just 24 hours. This includes bank accounts, trading accounts, demat accounts, and related services.

He also raised a broader behavioural question on X, asking whether reducing friction alone would significantly change NRI investment behaviour or whether deeper structural inertia remains a barrier.

The RBI, meanwhile, introduced a US dollar–rupee forex swap scheme on June 8, 2026, allowing banks to raise fresh FCNR(B) deposits without bearing currency hedging risks. This move enables higher returns for investors while encouraging inflows. The scheme is applicable only to new deposits and remains open until September 30, 2026.

Overall, while policy support has improved returns, Kamath emphasized that ease of access may ultimately determine the scheme’s success.