FCNR (B) deposits may have surpassed 2013 level of $26 billion in just 45 days: SBI report

New Delhi, July 27 (AHN) India may receive FCNR (B) deposits in the range of $65-70 billion by the end of the RBI scheme on September 30, and overall $80-$85 billion, an SBI Research report said on Monday.

The RBI figure of $20 billion inflows (till July 17) came as a positive reprieve, chiefly with a smart FCNR (B) corpus of $17.4 billion.

“We now estimate that FCNR (B) since then has already crossed 2013 level of $26 billion in just 45 days,” said Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.

The RBI data indicates that FCNR (B) deposits worth $17.4 billion have been mobilised till July 17, 2026 and trend suggests that PSBs are major drivers of this mobilisation.

“We also believe that significant majority of existing FCNR deposits which are going to mature in August/September 2026 will be renewed under the new scheme (gravitated by higher interest rates) and will boost the FCNR (B) inflows,” the report mentioned.

Preliminary estimate indicate that amount worth $10 billion on a conservative basis in addition to base line estimates are going to be mobilised mostly through those economies where tax concessions are available.

“Nevertheless, given the current trend we believe that total amount mobilised so far in 45 days has easily crossed the total amount mobilised in 2013 in three months,” the report noted.

However, broader markets are still wrestling with the co-relation of these flows with first FCA position and why the exchange rate has continued to weaken even after such strong capital inflows.

Public Sector Banks, front led by larger banks, are apparently anchoring the drive, ensuring incremental flows by leveraging not only the deposits, but also the trust built with materially significant clientele (credit worthiness and risk profile duly factored) spread across various geographies and remaining tacitly agile by shifting their strategy to an optimally blended Onshore-Offshore game plan.

The RBI intervention in the foreign exchange market has been somehow sporadic and not full throttled ever since the disturbances in West Asia has broken out.

“Rupee has moved 360 degrees; from being a shock absorber to not being a shock absorber. It is therefore important to not let the Rupee travel 360 degrees again but ensure its implied resilience to checkmate exogenous shocks without losing competitiveness,” the report said.

This is important given frictions in trade and supply/value chains, geopolitical risks and skewed capital flows.

—AHN

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