05 September,2026 05:49 PM IST | New Delhi | mid-day online correspondent
Representational Image. File pic.
India through Reserve Bank of India's (RBI), through its special forex swap window to bolster foreign-exchange liquidity, mobilised inflows of USD 136.4 billion and banks that leveraged their overseas balance sheet and offered the best interest rates captured the highest share, according to news agency IANS.
The inflows were not based on the bank's domestic deposits, as it far exceeded the normal deposit market footprint noted brokerage reports from Macquarie, Jefferies, Motilal Oswal Financial Services (MOSL) and BofA Securities.
Private sector lender ICICI Bank was the standout performer among domestic banks. The bank mobilised USD 17.88 billion, or around Rs 1.70 lakh crore, in FCNR(B) deposits, which roughly accounts 18 per cent share of the market, according to Macquarie.
As per Macquarie's estimate, more than 70 per cent of the mobilisation leverage came from the bank's own balance sheet, including nearly USD 9 billion in loans from its international branches and USD 3.6 billion in standby letters of credit issued to other banks.
Whereas, MOSL pegged ICICI Bank's share to a slightly lower 14 per cent but still twice its normal deposit-market footprint, supported significantly by its international balance sheet.
Smaller banks such as private sector lender RBL Bank mobilised around USD 3.4 billion, or approximately Rs 32,000 crore, accounting for about 2.7 per cent of total FCNR(B) deposits. This was significantly higher than its normal deposit market share of around 0.5 per cent, noted MOSL.
While domestic banks garnered significant inflows, foreign banks were the biggest beneficiaries. According to Jefferies, its share of FCNR(B) deposits increased sharply from around 1-2 per cent in early June to between 15 per cent and 30 per cent of incremental flows by the end of July.
Standard Chartered also secured around 7 per cent of the incremental flows.
HSBC was among the biggest recipients, with MOSL estimating that the bank had captured around 22 per cent of total inflows, mobilising USD 6.1 billion, or roughly Rs 58,000 crore, as of July 30. However, Jefferies' bank-wise data pointed out that HSBC's incremental deposits touched USD 6.14 billion by the end of August.
Under the RBI's special swap window, India's foreign currency assets expanded by USD 47.9 billion, taking total foreign exchange reserves to a record USD 729.3 billion.
The RBI mobilised a record USD 127.23 billion through Foreign Currency Non-Resident (Bank), or FCNR(B), deposits, as of August 31.
Including overseas foreign-currency borrowings (OFCB) worth USD 5.3 billion and external commercial borrowings (ECB) of USD 3.9 billion, the total inflows under the measures reached USD 136.377 billion.
The Reserve Bank of India had launched the concessional FCNR swap window on June as part of broader steps to encourage capital inflows to boost India's balance of payments during global uncertainty. Under this facility, banks can mobilise new FCNR-B deposits and exchange the dollars with the RBI at a lower, concessional rate.
Several banks raised rates on 3-5 year FCNR(B) deposits from around 2-4 per cent to 6-7 per cent, making the deposits more attractive to NRIs, as per IANS.
The facility that was implemented on June 8, 2026, and is available up to September 30, 2026, for the FCNR (B) deposits and up to December 31, 2026, for the Overseas Foreign Currency Borrowings and External Commercial Borrowings.
The government and RBI announced these measures to boost inflows as the West Asia crisis created significant challenges for the Indian economy. The rising oil prices and foreign portfolio investor outflows led to concerns over external stability given India is the third largest consumer and importer of crude oil.
(With inputs from IANS)
