International liabilities of banks rises by 36 pc till Dec

The RBI today said international liabilities of banks have increased 36 per cent as non-resident Indians deposited funds in their home country.
"International liabilities...Of the banks located in India surged by 35.8 per cent in December 2013, on account of accretion of capital flows through Foreign Currency Non-Resident (Bank) (FCNR(B)) deposits and foreign currency borrowings," RBI said in its latest report.
The FCNR(B) deposits rose to USD 35.29 billion at the end of December 2013 as compared to USD 13.39 billion at the end of December 2012.
In order to increase inflow of foreign funds, RBI had increase interest rate on FCNR deposits in August last year.

The central bank had raised the ceiling to LIBOR/Swap plus 400 basis points to help attract more inflows from abroad.
However, the ceiling on its swap windows for FCNR-(B) of more than one-year but less than three-year maturities will remain at the existing LIBOR/Swap plus 200 basis points.

In terms of Exchange Earners Foreign Currency (EEFC), the deposits grew by USD 3.17 billion during the quarter as against USD 2.2 billion at the end of December 2012.
RBI said that increase in both international liabilities and assets (LBS) was contributed by increase in exposure towards the USA, UK, UAE, Singapore, Germany and Hong Kong during 2013.

As at end-December 2013, it said, the share of US Dollar in international liabilities (LBS) rose to 40.5 per cent from 34.0 per cent a year ago.