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HSBC, SBI and ICICI capture half of India FCNR inflows under RBI scheme
RBI said banks received $36.7 billion under the FCNR deposit incentive route through July 31, with HSBC, SBI and ICICI together accounting for about half of that total.
HSBC, State Bank of India and ICICI Bank together pulled in about half of India’s foreign currency non-resident, or FCNR, deposit inflows under an RBI incentive scheme aimed at attracting dollars and supporting the rupee, official data reviewed by LiveMint showed.
The FCNR program, announced June 5 and implemented three days later, lets non-resident Indians place leveraged and unleveraged deposits at Indian banks while the RBI takes the hedging risk. The scheme runs through the end of September.
RBI said in a statement dated August 1 that banks received $36.7 billion via the route through July 31. LiveMint reported that public sector banks accounted for $8.8 billion, private sector banks for $10.7 billion, and foreign banks for $8.4 billion, with the remainder going to small finance and cooperative banks.
LiveMint also noted that junior finance minister Pankaj Chaudhary told parliament the foreign exchange swap mechanism that follows bank deposits is designed to increase FX reserves and banking system liquidity after the first leg of transactions, which would be reversed at maturity. In the latest breakdown of outstanding FCNR deposits, HSBC’s balance rose by $6.1 billion, SBI’s by $4.1 billion and ICICI Bank’s by $3.7 billion through July 30, with other banks including Standard Chartered, Kotak Mahindra Bank, Axis Bank, HDFC Bank and Bank of Baroda also raising more than $1 billion each.