Home / Business and Economy / SBI Dominates Forex Inflows: $1.9B Raised!
SBI Dominates Forex Inflows: $1.9B Raised!
17 Jul
Summary
- SBI raised nearly $1.9 billion under central bank incentive scheme.
- This amount significantly surpasses other banks' mobilization efforts.
- Banks now aim to attract overseas currency from Indian diaspora.
State Bank of India (SBI) has successfully mobilized approximately $1.9 billion in foreign-currency resources, leveraging a special incentive scheme introduced by the central bank. This achievement marks the highest amount secured by any state-owned bank and significantly outperforms private sector competitors.
Following SBI's lead, Bank of Baroda raised $273 million, while Canara Bank and Punjab National Bank each mobilized $80 million. These figures, reported recently, underscore a strategic shift by Indian banks towards attracting foreign currency from the Indian diaspora.
The Reserve Bank of India's (RBI) scheme, active since early June, absorbs hedging costs for three- to five-year foreign-currency deposits. This allows banks greater flexibility to structure leveraged offerings, such as charging around 5.8% on loans against offering about 6.5% on FCNR(B) deposits for substantial own-fund contributions.
SBI's substantial mobilization includes both bond issuances and FCNR(B) deposits swapped with the RBI. The bank's extensive global presence with over 240 overseas offices facilitated its early engagement with international bond markets following the scheme's announcement.
