FCNR B SCHEME
Explained: Why RBI’s FCNR(B) and ECB swap window could be a game changer for banks
RBI’s FCNR(B) and ECB swap windows aim to boost liquidity, stabilise the rupee and ease funding costs for banks. Attractive returns for NRIs and lower hedging costs for lenders create a win-win. Strong inflows could support credit growth, margins and offset persistent FPI outflows from Indian banking stocks.
FCNR(B): Revisiting a proven crisis management tool
Facing renewed external sector pressures, the RBI has revived a version of the FCNR(B) deposit framework to attract foreign currency inflows and support the rupee. While effective for near-term stability, experts say long-term resilience requires reducing structural vulnerabilities and import dependence.
Bringing in US dollars: RBI flags off FCNR(B) chase, pushes banks to go all out for forex inflows
In an ambitious bid to enhance India's foreign currency reserves, the Reserve Bank of India is urging banks to ramp up their efforts in attracting foreign currency non-resident deposits (FCNR(B)). By rolling out a series of enticing incentives for these deposits, the central bank aims to bolster dollar inflows, which will ultimately fortify the stability of the Indian rupee.
RBI pushes banks to bring more dollars home
The push comes amid RBI measures to incentivise foreign currency inflows, including swap facilities and hedging cost support for FCNR(B) deposits, aimed at strengthening forex reserves and easing pressures on the rupee. The rupee depreciated nearly 11% last fiscal year and touched a record low of 96.96 against the US dollar in May. It closed at 95.11 on Friday.
PNB, Ujjivan raise FCNR deposit rates
Punjab National Bank and Ujjivan Small Finance Bank have raised interest rates on FCNR(B) USD deposits for Non-Resident Indians. This move follows the RBI's announcement of a foreign currency swap window. Bank of Baroda has also introduced a new retail term deposit scheme for resident Indians. These initiatives aim to attract foreign capital and offer attractive returns to depositors.
Revised FCNR interest rates up to 7.13%: PNB, ICICI Bank, Axis Bank and others revise rates
FCNR interest rates: Banks are increasing interest rates on Foreign Currency Non-Resident (FCNR-B) deposits for NRIs, OCIs, and POIs. This follows the RBI's announcement to cover hedging costs for new 3 to 5-year deposits until September 2026. Axis Bank now offers up to 6% on these schemes for select tenures.
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RBI move sparks race among banks to raise FCNR(B) deposit rates; smaller lenders offer over 7% on USD deposits
Banks are aggressively increasing interest rates on NRI dollar deposits. This move follows a special RBI dispensation to boost foreign currency inflows. Several lenders are now offering over 7 percent on US dollar FCNR(B) deposits. This initiative is expected to attract significant foreign currency into India. The competition among banks is intensifying to secure these valuable overseas funds.
PSBs may lose the edge over private peers as tightening liquidity, rising credit costs may impact growth
Public sector banks' advantage over private lenders is fading. Excess liquidity and low credit costs are diminishing. Liquidity coverage ratios have dropped, and credit costs are expected to rise. Competition from private banks will intensify. Private sector lenders are projected to grow faster from next fiscal year, reclaiming market share.
Banks raise NRI deposit rates to draw dollar inflows
Indian banks are offering higher interest rates on foreign currency deposits. This move aims to attract money from overseas residents. The Reserve Bank of India has introduced new measures to boost dollar inflows. These efforts are designed to strengthen the Indian rupee. Experts predict significant inflows could stabilize the currency. This strategy revives a successful approach from 2013.
Latest FCNR interest rates: HDFC Bank, SBI, ICICI Bank, PNB, Central Bank of India, BoB and more
Several Indian banks have updated their Foreign Currency Non-Resident Bank FCNR(B) interest rates. This comes after the government announced it would cover hedging costs for new 3 to 5 year FCNR(B) deposits. This initiative benefits Non-Resident Indians and others. Central Bank of India is offering a 6% interest rate on these deposits.
India's current account deficit to remain 1.5-1.7% of GDP in FY27 but RBI measures may turn BoP surplus: SBI Report
India's current account deficit is projected for FY27. However, Reserve Bank of India measures are anticipated to improve the country's external position. These steps aim to strengthen the Rupee and attract foreign capital. This could lead to a balance of payments surplus for FY27. Inflows are expected to boost foreign exchange reserves and banking system liquidity.
RBI measures likely to attract USD 55-65 billion inflows in FY27: SBI report
India anticipates USD 55-65 billion in foreign inflows this fiscal year. The Reserve Bank of India's recent measures aim to stabilize the rupee and boost the country's balance of payments. These initiatives are expected to attract more foreign capital and deepen the domestic debt market. The overall balance of payments is projected to be in surplus for FY27.
From tax exemption to FCNR(B) deposits: How India is trying to attract foreign capital
India is taking steps to attract foreign investment and boost its economy. The Reserve Bank of India and the government have introduced new measures. These aim to bring in more dollars and stabilize the rupee. The initiatives include special swap facilities and tax exemptions for foreign investors. These actions are designed to make Indian markets more appealing to overseas capital.
Banks, Bharti, IT: Sandip Sabharwal's top picks & why he is worried about Zepto IPO
Market expert Sandip Sabharwal sees private banks like Axis and ICICI as top buys. He believes IT stocks are oversold with potential for 12-15% upside. Bharti Airtel is his sole pick in telecom. Sabharwal cautions against richly valued domestic companies, citing Zepto's IPO valuation as an example. Investors should focus on these domestic concerns rather than overseas IPOs.
Deposits under RBI's latest foreign currency non-resident bank scheme will carry one-year lock-in
The Reserve Bank of India's new FCNR-B scheme offers a one-year lock-in for deposits and mandates non-cancellable swaps for banks. This initiative, featuring an attractive at-par swap arrangement, aims to attract significant foreign currency inflows, with banks exempted from CRR and SLR requirements on these deposits.
RBI opens a dollar swap window to help hedge foreign borrowings
The Reserve Bank of India is introducing a dollar-rupee swap facility for banks. This move aims to help state-run firms and lenders hedge their foreign currency borrowings. The facility will be available at a fixed cost of 1.5% per annum. This initiative is expected to encourage significant inflows into the FCNR-B window.
Banks to be told to step up FCNR (B) deposits
Banks will now encourage more foreign currency deposits. The Reserve Bank of India will cover all hedging costs for these deposits. This move aims to attract significant foreign currency inflows. Industry estimates suggest up to $40 billion could be raised. These measures will strengthen India's foreign exchange reserves. This will help manage rupee depreciation pressures.
Rupee in rhapsody, passes 95 vs USD level at close
On Friday, the Indian Rupee made impressive gains, climbing 84 paise against the US Dollar. This upward momentum came after the Reserve Bank of India and the government introduced initiatives to lure foreign investors. Closing at 94.95, the Rupee reached its strongest point in over two months. Analysts are optimistic about increased inflows, which could further enhance the currency's performance.
RBI policy press conference: Here's everything that came up for discussion
The Reserve Bank of India unveiled new measures to attract deposits and bolster the economy. Governor Sanjay Malhotra discussed strategies for economic growth and inflation management. The central bank aims to draw in foreign exchange through various initiatives. These steps are designed to ensure a stable economic environment and encourage investment.
These 7 private and public banking stocks have an upside of up to 23% in one year, according to analysts
Given how the market has moved in the last five-six trading sessions, the probability is high that a new readjustment trade has started. This trade takes into account the second- and third-order impact of rising crude oil prices, as also a poor monsoon that could play spoilsport for the Indian economy. What does this mean for the banking sector? Check out Stock Reports Plus, powered by Refinitiv, for price targets of over 4,000 listed stocks along with detailed company analysis focusing on five key components ,earnings, fundamentals, relative valuation, risk, and price momentum, to generate standardised scores. SR+ Reports is a complimentary offering to ETPrime members.
Bond won't help this time: Why RBI should hike interest rate, instead of unleashing forex mobilisation schemes as in the past
Reserve Bank of India's past emergency tools for raising foreign currency are no longer effective. Global interest rates have changed the financial landscape. The article suggests that raising interest rates is now the only reliable way to protect the Indian Rupee. This move aims to make the currency more attractive and reduce import demand.
These 9 banking stocks have an upside potential of up to 32% in 1 year, according to analysts
It is always important to make a distinction between sentiment and real business. While sentiment can impact prices in the short term, it is business fundamentals that matter in the long term. And if they are turning structurally better, just ignore the noise on the street. Check out Stock Reports Plus, powered by Refinitiv, for price targets of over 4,000 listed stocks along with detailed company analysis focusing on five key components ,earnings, fundamentals, relative valuation, risk, and price momentum, to generate standardised scores. SR+ Reports is a complimentary offering to ETPrime members.
What happens when investors stop SIPs during crises–real investors, real panic, and the real cost of walking away
From a cancer diagnosis in Kolkata to a layoff in Bengaluru to Covid panic in Agra—real investors, real crises, and the real cost of walking away.
Lenders urge RBI for hedging support framework to revive overseas borrowing
Indian banks and companies are asking the Reserve Bank of India for help with offshore debt. High costs to protect against currency changes make borrowing abroad more expensive than at home. This is slowing down foreign fundraising. A new support system could lower these costs. This would help bring more foreign money into India and support its economy.
These 6 banking stocks have an upside potential of up to 30% in 1 year, according to analysts
It is a question often heard on the street: Which is better, private or PSU banks? To some extent, it is a meaningless question. Both private and PSU banks operate in the same ecosystem and are equally impacted by what happens to the economy. What plays an important part in their stock price is the difference in ownership structure. Check out Stock Reports Plus, powered by Refinitiv, for price targets of over 4,000 listed stocks along with detailed company analysis focusing on five key components ,earnings, fundamentals, relative valuation, risk, and price momentum, to generate standardized scores. SR+ Reports is a complimentary offering to ETPrime members.
ET Graphics: BoP stability tested by outflows & Rupee fall
India's external accounts are under strain. The current account deficit is widening, and capital may flow out. The rupee has weakened significantly. Policymakers are considering various measures beyond interest rate hikes to stabilize the currency. These include incentives for foreign deposits and liberalizing capital inflows. State-owned banks may also issue foreign currency bonds.
These 8 private and public banking stocks have an upside of up to 27% in one year, according to analysts
Inflation is at a 13-month high, primarily led by a rise in food prices. And with an impending fuel price hike, it could spike even more. An appeal by the prime minister for austerity, an earnings season with some good and more not-so-good numbers, and valuations that are not cheap even even after an extended correction. All this is a perfect cocktail for a correction. There may be a silver lining, though. Check out Stock Reports Plus, powered by Refinitiv, for price targets of over 4,000 listed stocks along with detailed company analysis focusing on five key components ,earnings, fundamentals, relative valuation, risk, and price momentum, to generate standardised scores. SR+ Reports is a complimentary offering to ETPrime members.
RBI may have to bear forex risk to boost foreign money inflows
India may need central bank support to attract dollar investments, potentially through forex deposit schemes, to cover exchange risks and offer competitive yields. Economists suggest higher subsidies from the RBI might be necessary to make such initiatives attractive for banks, especially given current global interest rates.
Overseas Indians parked $1 billion in NRI deposits in April
During the month a bigger chunk was garnered under the NRE (RA) with deposits worth $583 million, while $483 million flows were in FCNR(B) scheme. In addition to these two schemes, NRIs also park funds in NRO or non-resident ordinary deposit schemes. The funds in these schemes are meant for local use by the NRI and repatriable upto a certain limit. About $27 billion is the outstanding amount parked in this scheme compared to the outstanding amount of $99 billion in NRE(RA) and $26 billion in FCNR(B).
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