Dear friend from HR Revolution Services,
To my knowledge there is no legal bar in collection of security deposit from employees, if the nature of job requires handling of cash and other valuables in the business transactions of the organization. Therefore, the fairness of such a practice depends entirely upon the nature of the responsibilities of the job position. Certainly, it will be mandatory to pay interest normally at current bank rate when the contract comes to end.
In case of companies registered under the Companies Act,2013, if I remember correct, the collection of of security deposit is permissible under rule 2(1)(c)(x) of the Rules,2014. But it shall be non-interest bearing deposit not exceeding the concerned employee's annual salary. For further clarification you may please refer to the Companies { Acceptance of Deposits) Rules,2014.
Coming to the present thread, if the intended security deposit is purely for the purpose of compelling the FTC employee to serve the entire tenure of the contract, I think it will not be fair and also it would be an illegal deduction from salary under the PWAct,1936 and the Code on Wages,2019.