New Delhi, Aug. 3 -- India's largest private sector lenders HDFC Bank and ICICI Bank have both hiked their Foreign Currency Non-Resident (Bank) interest rates for fixed deposits this month, disclosures on their websites showed.

FCNR FD interest rates are the rates of return banks offer on tenured deposits held in foreign currencies by Non-Resident Indians (NRIs) and allow them to invest their foreign earnings in India without worrying about exchange rate fluctuations.

The moves come after the Centre reduced hedging costs for few FCNR (B) deposits, allowing banks to pass some relief to customers. The Reserve Bank of India (RBI) in June said that hedging costs on three-to-five-year FCNR (B) deposits will be borne by the government till 30...