Foreign fund flows remain weak for banks despite RBI's liberal steps

The measures have brought in $1.5-2 billion so far; response to relaxed FX norms tepid as US rates higher, RBI not acting as counterparty

Almost two and a half months after the Reserve Bank of India (RBI) further liberalised the ways by which banks can tap overseas deposits, the measures have brought in $1.5-2 billion so far, according to sources.

However, this is far lower than the amount garnered in 2013, when the central bank had offered a special window for foreign currency deposits.

Sources said based on the current momentum, the funds likely to be raised through the RBI’s relaxed window would be $3.5-4 billion.

About 40 per cent of the funds would be through foreign currency non-resident (banks), or FCNR (B), deposits