The sharp rise followed the RBI's introduction of a concessional foreign exchange swap facility in June to encourage banks to mobilise foreign currency deposits
FCNR(B) deposit flows surged to $34.53 billion in April-July FY27, while outward remittances under the LRS rose 4.7 per cent year-on-year to $9.37 billion
The trade is emerging as RBI seeks to bolster foreign-exchange reserves and ease pressure on rupee, while creating opportunities for global banks to provide financing offshore
The moderation was driven by weaker inflows into NRE and FCNR(B) accounts, though recent RBI measures have triggered a sharp rise in fresh FCNR(B) deposits
The RBI announced a zero-cost foreign-exchange swap facility at its June 5 policy meeting for deposits raised from non-resident Indians, allowing banks to offer higher returns on such deposits
RBI's push to attract FCNR deposits may ease external pressures, but improving conditions raise questions over the costs, risks and necessity of the incentives
While FCNR(B) deposit inflows fell sharply from a year earlier, overall inflows into non-resident deposit schemes edged up, supported by growth in NRE deposits
Private-sector lender increases FCNR(B) deposit rates following RBI's forex swap facility and temporary removal of the interest rate ceiling on eligible deposits
Indian banks are targeting overseas nationals with high-yield dollar deposits to attract over $50 billion and bolster forex reserves amid rupee pressure
Brokerages estimate leveraged FCNR(B) deposits could generate annual returns of up to 27 per cent for NRIs while helping banks attract $30-60 billion in fresh foreign currency inflows
Axis Bank has increased FCNR(B) deposit rates by up to 305 basis points, joining several lenders seeking to attract foreign currency inflows under the RBI's special swap facility
