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Informist, Monday, Jul. 27, 2026

 

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--Canara Bank MD: Have raised $775 mln FCNR(B) deposits so far 
--Canara Bank MD: Aim to cross $1 bln FCNR(B) deposits by month-end 
--CONTEXT: Comments by Canara Bank's mgmt at post-earnings press conference 
--Canara Bank MD: May need extra provision of INR 100 bln for ECL transition 
--Canara Bank MD: Endeavour to increase retail, agri, MSME loan book 
--Canara Bank MD: FCNR(B) deposits to replace some high cost bulk deposits 
--Canara Bank MD: See good traction in gold loans going forward 
--Canara Bank: Already started replacing bulk deposits with FCNR(B) deposits 
--Canara Bank: May be able to replace INR 100 bln bulk deposits with FCNR(B) 
--Canara Bank: Traction in SB-individual, term deposits to aid total growth 
--Canara Bank MD: Plan to open 250 branches FY27, mostly in Southern region 
--Canara Bank MD: Not seen impact from El Nino on portfolio so far
 

 

NEW DELHI/MUMBAI – Canara Bank has mobilised $775 million worth of foreign currency non-resident deposits so far and hopes to cross the $1 billion mark by the end of this month, Managing Director and Chief Executive Officer Brajesh Kumar Singh said Monday. In total, the state-owned bank aims to attract almost $2.3 billion-$2.5 billion through FCNR(B) deposits, external commercial borrowing and overseas foreign currency borrowings, he said. Of this, the lender expects to attract $1.5 billion through FCNR(B) deposits.

 

"We wish and we expect that we will be crossing $1 billion this month itself," Singh said at the post-earnings press conference. "$1 billion and we will be even bettering our guidance of $2.3-$2.5 billion, all together all the three FCNR(B), ECB (External Commercial Borrowing) and OFCB (Overseas Foreign Currency Borrowings)."

 

On Jun. 8, the Reserve Bank of India unveiled a facility under which it would bear the full hedging costs for banks raising fresh three- to five-year FCNR(B) deposits until Sept. 30. Following this, Canara Bank raised its interest rates on FCNR(B) deposits for tenures three years to four years by up to 280 basis points to 6.50%. The bank also raised interest rates on FCNR(B) deposits for four-years to five years tenures by 100 bps to 6.50%.

 

The swap facility for external commercial borrowings and overseas foreign currency borrowing will remain open up to Jan. 15, 2027, for eligible external commercial borrowings drawdowns made and overseas foreign currency borrowing flows received up to Dec. 31. 

 

Canara Bank has already started replacing its high bulk deposits with FCNR (B) deposits, Singh said, adding that he expects the FCNR(B) deposits to replace around INR 100 billon worth of high cost bulk deposits. "As per our guidance, around INR 14,000 crores (INR 140 billion) we are going to grow on FCNR(B)," he said. "So, some some way we are growing little more in advances than to deposit. So, not INR 14,000 crore but at least INR 10,000 crores (INR 100 billion) we will be certainly shedding."

 

Further, the Bengalauru-based bank is "very much" prepared for transitioning towards the Reserve Bank of India's new expected credit loss framework, he said. "Both on part of knowledge partner and technological partner, everybody is on place and then we expect by month of October, we will start that dry parallel run and come Apr. 1, 2027, we will be fully prepared for it," he said.

 

On account of that, an extra provision of around INR 100 billion-INR 120 billion may be required for the transition, Singh said. The RBI's new framework requires banks to provide for expected future credit losses rather than waiting for loans to turn non-performing. The expected credit loss framework will come into effect from Apr. 1, 2027.

 

The lender has not seen any impact of El Nino on its business portfolio so far, Singh said. Further, the public-sector bank endeavours to increase its retail, agriculture and micro, small and medium enterprises loan book further and expects demand for credit to be good in all segments next quarter as well. Singh also expects good traction in the gold loan book going forward. 

 

Canara Bank's total advances were up nearly 18% on year at INR 12.93 trillion as of Jun. 30. Of this, loans to retail, agriculture and micro, small and medium enterprises grew over 21% on year to INR 7.65 trillion. Canara Bank expects credit growth of 11-12% in 2026-27 (Apr-Mar). 

 

On the deposit front, the lender sees growth of 9-10% in FY27 on the back of Saving Bank-individual deposits and retail term deposits, he said. Deposits of the bank rose nearly 12% on year to INR 16.12 trillion as on Jun. 30. Of this, saving deposits rose over 10% on year to INR 3.77 trillion. Retail term deposits rose 9% on year to INR 5.98 trillion. 

 

The bank aims to open 250 branches in FY27, with most of them in the Southern region. Canara Bank's net profit rose over 2% on year and nearly 8% on quarter to INR 48.56 billion in the June quarter. On Monday, shares of the bank closed 1.3% higher from the previous close at INR 127.26 on the National Stock Exchange. The earnings were announced during market hours.  End

 

Reported by Pratiksha and J. Navya Sruthi

Edited by Akul Nishant Akhoury

 

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