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Informist, Friday, Jul. 17, 2026

 

--Sources: RBI set targets for bks to attract FX capital under FCNR(B) plan 
--Sources:RBI set overall target of $90 bln for inflows under FX schemes

--CONTEXT: RBI gave sops for FCNR(B), FX borrowing, FX bond issuance June
--Sources: RBI told PSU banks to raise $20 bln via FCNR(B) deposits Sept-end 
--Sources:RBI told pvt-sector bks to raise $20 bln via FCNR(B) deposits Sept 
--Sources: RBI told banks to raise $20 bln via offshore FX borrowing by Dec 
--Sources:RBI aiming for PSU external commercial borrowing of $30 bln by Dec 

 

By Kabir Sharma

 

MUMBAI – The Reserve Bank of India aims to attract about $90 billion through a mix of Foreign Currency Non-Resident (Bank) deposits, offshore borrowings, and foreign currency bond issuances till the end of the calendar year, according to sources familiar with the matter. It has assigned targets to banks to mobilise foreign capital under the various incentivised schemes launched in June, part of a drive to shore up its foreign exchange reserves and support the rupee.

 

The RBI has asked public sector banks to mobilise around $20 billion through FCNR(B) deposits by the end of September, while private sector banks have been given a collective target of $20 billion under the scheme over the same period, the sources said. Beyond FCNR(B) deposits, the RBI has directed banks to raise another $20 billion through offshore foreign currency borrowings by December, the sources said. Separately, the central bank is targeting about $30 billion of external commercial borrowings from public sector entities by the end of December. 

 

The RBI on Jun. 8 opened a swap window where it will bear the hedging costs of banks converting capital raised through mobilising 3-5 year FCNR(B) deposits. The central bank also has other swap windows open for public sector undertakings bringing in foreign capital through external commercial borrowings and banks raising offshore foreign currency borrowings, offering a concessional rate of 1.5% per annum. The FCNR(B) leeway is for deposits raised by Sept. 30, while the other swap window is for funds raised until December.

 

Several lenders have publicly disclosed mobilisation targets under the scheme. Indian Bank has said it aims to raise around $2 billion through FCNR(B) deposits and has reported a sharp pick-up in inflows since the RBI removed the interest rate ceiling on eligible deposits. Union Bank of India recently said it has already mobilised $105 million through FCNR(B) deposits and is actively approaching overseas customers to accelerate inflows. Punjab National Bank has targeted raising $2.5 billion-$3 billion under the scheme.

 

Banks have also raised deposit rates to attract overseas Indians. Several lenders are now offering FCNR(B) deposit rates of as much as 7% to 7.5% under the special RBI window, compared with significantly lower rates before the June measures, helped by the central bank bearing the hedging cost through the swap facility. 

 

IndusInd Bank has raised interest rates on dollar-denominated foreign currency non-resident bank deposits by 290-315 basis points to 6.60-6.75% for three- to five-year tenors. Ujjivan Small Finance Bank increased its FCNR(B) deposit rate for 3-5 years to 7.50% in June, the highest across all banks.  End

 

US$1 = INR 96.28

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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