HSBC, SBI, ICICI Bank Top Beneficiaries of RBI's NRI Dollar Deposit Scheme
Quick Look
- HSBC, SBI, and ICICI Bank were the top beneficiaries of the RBI's dollar deposit scheme for non-resident Indians, attracting $6.14 billion, $4.12 billion, and $3.7 billion respectively.
- The scheme garnered $36.7 billion in total, helping stabilize the rupee after a period of depreciation.
AI-generated summary
Why It Matters
The RBI launched a dollar deposit scheme for NRIs to counter sustained depreciation pressure on the rupee, which had declined to a record low in May.
State Bank of India, HSBC and ICICI Bank have garnered the largest amounts under a central bank scheme to attract dollar deposits from non-resident Indians, government data showed on Monday.
HSBC's India unit raised about $6.14 billion, the most among lenders, while State Bank of India, the country's largest lender, garnered about $4.12 billion between June 5 and July 30, the data showed.
ICICI Bank led private-sector peers with about $3.7 billion in deposits under the scheme. HDFC Bank and Axis Bank, the country's largest and third-largest private lenders respectively, raised about $1.5 billion each.
The central bank's measures, the likes of which were last deployed in 2013 to deal with the Federal Reserve's taper tantrum, were rolled out following a period of sustained depreciation pressure on the rupee.
The currency had declined to a record low in May but has steadied after the measures were announced in June.
The steps are intended to "attract stable foreign currency inflows, strengthen India's balance of payments and help ease recent pressures on the Indian Rupee," Minister of State for Finance Pankaj Chaudhary told the lower house of the Parliament on Monday.
Combined, banks' stock of overseas foreign-currency deposits has grown by nearly $28 billion between June 5 and July 30, reflecting the fresh deposits raised under the scheme.
The Reserve Bank of India said on Saturday the scheme had attracted total inflows of $36.7 billion. The difference likely reflects existing foreign-currency deposits that were rebooked under the scheme.
Outstanding foreign currency non-resident (bank), or FCNR(B), deposits rose to $60.55 billion from $32.56 billion on June 5.
"The pace of capital inflows under FCNR(B), external commercial borrowings and overseas foreign currency borrowings has been much stronger than expected. Total inflows across instruments are likely to be $90 billion, if not higher," IDFC First Bank said in a note.
What to Watch
AI outlook — possibilities, not facts
Total inflows across instruments are likely to be $90 billion, if not higher.
Likely · Within months
Open Questions
- Will the rupee maintain its stability long-term?
- What will be the total inflows by year-end?
- Will similar schemes be needed again soon?
