Mumbai, September 5 (Daily Kiran) : The Indian banking sector has seen a remarkable response to the Foreign Currency Non-Resident (Bank) or FCNR(B) deposit scheme initiated by the Reserve Bank of India (RBI). This initiative has attracted an impressive inflow of $127.22 billion.
According to brokerage reports from Macquarie, Jefferies, and Motilal Oswal Financial Services (MOSL), banks have offered enticing interest rates to draw in investors. The contributions to this inflow are not strictly proportional to the banks’ domestic operations, with several institutions performing exceptionally well relative to their size.
ICICI Bank has emerged as a leader among private banks, securing $17.88 billion (approximately ₹1.70 lakh crore) in FCNR(B) deposits. Macquarie notes that over 70% of this fundraising came from the bank’s own balance sheet, including around $9 billion in loans from its international branches and $3.6 billion in standby letters of credit issued to other banks.
MOSL estimates that ICICI Bank’s share in this scheme is about 14%, which is double its market share in general deposits. The bank’s robust fundraising capability has been significantly supported by its international balance sheet.
RBL Bank, a smaller private institution, also outperformed expectations. MOSL reports that RBL raised approximately $3.4 billion (around ₹32,000 crore), accounting for about 2.7% of total FCNR(B) deposits, far exceeding its general deposit market share of 0.5%.
Foreign banks have benefited the most from this scheme. Jefferies highlighted that their share in FCNR(B) deposits surged from around 1-2% at the beginning of June to between 15-30% by the end of July.
By July 30, HSBC Bank had captured about 22% of new deposits, amounting to $6.1 billion (approximately ₹58,000 crore). Data from Jefferies indicates that by the end of August, HSBC’s new deposits had reached approximately $6.14 billion. Standard Chartered also secured around 7% of the new deposits during this period.
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