The European Commission handed HSBC the highest penalty - €174.3m - while Barclays was fined €54.3m and NatWest €32.5m.
Credit Suisse was also fined, with the second largest penalty of the four, at €83.3m.
A fifth bank - fellow Swiss lender UBS - was spared a €94m penalty because it blew the whistle on the cartel, according to the European Commission, the EU's executive arm.
The commission said HSBC, Barclays and NatWest - which was called Royal Bank of Scotland at the time of the offences - had their fines cut for cooperating with the investigation.
The commission said in a statement that several foreign exchange spot traders “exchanged sensitive information and trading plans, and occasionally coordinated their trading strategies through an online professional chat room called Sterling Lads”.
This enabled the traders to make informed market decisions on whether and when to sell or buy the currencies they had in their portfolios, rather than acting independently of each other and taking a risk in making these decisions, according to the commission.
Margrethe Vestager, the EC vice president, said: “The collusive behaviour of the five banks undermined the integrity of the financial sector at the expense of the European economy and consumers.”
The probe focused on the trading of the G10 currencies - the most liquid and traded currencies worldwide. The commission said the penalties brought to a close its sixth cartel investigation in the financial sector since 2013.