03 September,2026 02:22 PM IST | Mumbai | mid-day online correspondent
Representational Image. File pic.
Banking stocks rallied on the bourses on Thursday after the Reserve Bank of India (RBI) mobilised a record USD 127.23 billion through Foreign Currency Non-Resident (Bank), or FCNR(B), deposits, as of August 31.
The RBI had also said that the total inflows reached USD 136.377 billion through its special forex swap window to bolster foreign-exchange liquidity, and this triggered buying across the banking sector.
Among the Sensex constituents, Axis Bank emerged as the top gainer with its shares rising 1.47 per cent to Rs 1,273.40 per share. The scrip of HDFC Bank rose 0.86 per cent to Rs 707 per share. ICICI Bank advanced 0.83 per cent to Rs 1439.90 apiece and State Bank of India's shares gained 0.86 per cent to Rs 1,029.50 per share.
Kotak Mahindra Bank was the only laggard among the Sensex constituents, with its shares declining 0.22 per cent to Rs 423.70 per share, from the previous close.
The rally was broad-based across the banking space. The BSE PSU Bank surged 0.97 per cent, while the BSE Private Banks Index gained 0.84 per cent. Bankex and BSE Top 10 Banks advanced 0.65 per cent and 0.69 per cent, respectively.
"A big positive from the rupee perspective is the huge mobilisation of USD 136 billion under concessional swap facility. The USD 127 billion mobilised under the FCNR(B) scheme has come way above the consensus estimates. The implication of this from the market perspective is that the rupee will stabilise, imparting confidence to Foreign Institutional Investors (FIIs)... Also, the huge FCNR(B) mobilisation by banks will help improve their net interest margins (NIMs). This is positive for banking stocks," V K Vijayakumar, Chief Investment Strategist, Geojit Investments said.
Net interest margin is a key financial metric to understand a bank's profitability.
Foreign Currency Non-Resident (Bank) or FCNR (B) deposits is a fixed-term deposit account offered by Indian banks. It allows non-resident Indians (NRIs), persons of Indian origin, or overseas citizens of India to maintain a fixed deposit in specified foreign currencies. The funds and the interest on these deposits is exempted from tax in India.
The RBI permits these deposits to encourage foreign currency inflows that helps to safeguard the rupee against depreciation and to strengthen India's foreign exchange reserves.
The RBI 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.
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 RBI on Wednesday said India 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) and external commercial borrowings (ECB), total inflows under the measures reached USD 136.377 billion, according to PTI.
(With inputs from PTI)
