Banks add $13.10 bn to FCNR(B) deposits collection box in just 8 days; total mobilisation under RBI’s three concessional swap facilities stand at $72.85 bn until 21 August.
Banks have mopped up $65.40 billion via FCNR(B) deposits under the Reserve Bank of India’s special swap window until 21 August, adding $13.10 billion to the collection box in just eight days.
The total mobilisation under the RBI’s three concessional swap facilities stood at $72.85 billion, with $16 billion added since the RBI last reported the figure of $56.85 billion until 13 August. In the last RBI count, the foreign currency non-resident (Bank), or FCNR(B), deposits raised under the special swap window stood at $52.30 billion.
Banks raised $4.86 billion through overseas foreign currency borrowings (OFCBs) until 21 August, up from $2.81 billion netted till 13 August. Another $2.59 billion came via external commercial borrowings (ECBs), up from $1.74 billion, the RBI said in its latest update on Saturday.
The RBI is shutting the FCNR(B) swap window a month ahead of schedule on account of “encouraging response” and the “resultant forex inflows”. The new cut-off date for the swap facility is 31 August instead of the earlier announced 30 September. The OFCB and ECB swap windows, however, will continue to be open until 31 December.
The RBI expects the three concessional swap schemes to attract at least $80 billion of forex inflows. The forex mobilisation would help to bolster India’s balance of payments and defend the rupee from weakening against the dollar.
The RBI had operationalised on 8 June the forex swap facility covering FCNR(B) deposits, ECBs and OFCBs.
Banks have been making a queue to the international markets to raise money after the RBI announced an early closure of its special concessional window on FCNR(B) deposits. During the week, ICICI Bank, Kotak Mahindra Bank, IDFC First Bank, HDFC Bank and Bank of Baroda raised a total of $4.4 billion, with an eye on possibly funding leverage schemes for FCNR(B) deposits.
On Friday, ICICI Bank’s board approved doubling its offshore borrowing limit to $5 billion while a day before HDFC Bank raised $1.75 billion in senior unsecured bonds. Among others, State Bank of India and Axis Bank have also tapped the overseas market.
