FCNR(B) bonanza: Banks mobilise record $127.226 billion in 85 days, nearly four times 2013 levels
This influx, driven by attractive interest rates of 6-7.5% and significant leverage incentives for non-resident Indians, occurred through the Reserve Bank of India’s concessional swap facility
The Reserve Bank of India's FCNR(B) concessional swap facility attracted record $127.226 billion in fresh Foreign Currency Non-Resident deposits from June 8 to August 31, nearly quadrupling 2013 levels. With attractive interest rates of 6-7.5 per cent and leverage incentives, banks mobilised $65.397 billion between June 8 and August 21, followed by an accelerated effort in the final 10 days to raise another $61.829 billion.
Banks provided up to 19 times the deposit amount in leverage to NRIs placing deposits of $1 million or more. Exempt from statutory pre-emptions like CRR and SLR, these deposits significantly boosted the overall $136.377 billion mobilised under the USD-INR forex swap facility, surpassing expectations of $80-100 billion.
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