The chiefs of public sector banks and financial institutions updated Finance Minister Nirmala Sitharaman on the positive response from NRIs to increased interest rates and incentives on foreign currency non-resident bank deposits. Banks anticipate a rise in NRI funds, intensifying outreach efforts to the Indian diaspora. Sitharaman urged banks to enhance engagement with NRIs, introduce innovative deposit products, and maintain the momentum of mobilization.
Managing directors highlighted the appealing returns on FCNR (B) deposits, especially on five-year deposits, due to the suspension of the interest rate ceiling on fresh FCNR(B) deposits. They reported significant interest from NRIs in various regions like Singapore, Hong Kong, the West Asia, the UK, the US, and other overseas areas. Plans are in place to capitalize on this positive sentiment and boost deposit mobilization, with confidence in increased ECB mobilization in the upcoming quarter.
Public sector banks have implemented tailored outreach strategies, including digital channels, to connect with non-resident Indian diaspora for enhanced deposit mobilization. The acceleration in FCNR(B) deposit mobilization is evident, supported by attractive returns. International Banking Units at the International Financial Services Centre in GIFT City, Gujarat, are utilized to attract funds from multiple jurisdictions. Sitharaman encouraged banks to maximize the financial services and infrastructure available at GIFT City.
During discussions, the RBI Deputy Governor assured active support to banks and financial institutions in mobilizing deposits and facilitating eligible borrowings. The robust daily reporting framework by the RBI ensures transparent, real-time monitoring of progress. The participation of public sector banks, private sector banks, and public financial institutions highlights the effectiveness of swap facilities in mobilizing foreign currency inflows, strengthening India’s foreign exchange reserves, and enhancing external sector resilience.
The schemes, announced by the RBI Governor on June 5, 2026, include a US Dollar-Rupee forex swap facility for fresh FCNR(B) deposits and a concessional swap facility for eligible ECBs and OFCBs. These initiatives aim to attract foreign capital, bolster the balance of payments, and incentivize capital inflows. FCNR(B) deposits are eligible until September 30, 2026, while ECBs and OFCBs are eligible until December 31, 2026.
