Union Finance Minister Nirmala Sitharaman met with MD&CEOs of Public Sector Banks on Monday. She has asked banks to strengthen their outreach to Non-Resident Indians (NRIs) to increase foreign currency deposits.
Review of FCNR(B), ECB and OFCB Schemes
The meeting reviewed the progress of Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, External Commercial Borrowings (ECBs), and Overseas Foreign Currency Borrowings (OFCBs) swap schemes. The Finance Minister appreciated the encouraging response received so far and urged banks to maintain the momentum.
Banks Asked to Launch Better Deposit Products
The Finance Minister asked banks to actively connect with the NRI community, introduce attractive deposit products, and continue mobilising foreign currency deposits during the remaining period of the schemes.
Strong Response from NRIs Across the World
Bank CEOs informed the Finance Minister that the schemes have received a good response from NRIs living in Singapore, Hong Kong, West Asia, the United Kingdom, the United States, and several other countries.
They said banks are offering attractive interest rates on FCNR(B) deposits, including five-year deposits. This has been possible because the Reserve Bank of India (RBI) has temporarily removed the interest rate ceiling on fresh FCNR(B) deposits under the scheme.
Banks Using Digital Channels for NRI Outreach
Public sector banks said they have created customised outreach plans using digital platforms and other communication channels to connect with NRIs and attract more foreign currency deposits.
Banks also said that the mobilisation of FCNR(B) deposits has been increasing steadily due to attractive returns.
GIFT City to Play Bigger Role
Banks informed the Finance Minister that they are using International Banking Units (IBUs) at GIFT City in Gujarat to raise funds from different countries, including the UK, USA, West Asia, Hong Kong, Singapore, and Southeast Asia.
The Finance Minister encouraged banks to make full use of the financial infrastructure available at GIFT City.
RBI Assures Full Support
A senior RBI official assured banks that the central bank is fully supporting them in mobilising foreign currency deposits and facilitating eligible overseas borrowings.
The RBI has also introduced a daily reporting system that allows real-time monitoring of the progress made by participating banks and financial institutions.
Schemes Aim to Strengthen India’s Foreign Exchange Reserves
According to the Finance Ministry, the participation of public sector banks, private banks, and financial institutions is helping attract foreign currency into India. This will strengthen the country’s foreign exchange reserves, improve the balance of payments, and make India’s external sector more resilient during global economic uncertainty.
