SBI Leads Foreign Currency Mobilisation With $1.9 Billion Under RBI Scheme

State Bank of India (SBI) has emerged as the biggest beneficiary of the Reserve Bank of India's (RBI) special foreign-currency mobilisation scheme, raising nearly $1.9 billion so far, according to people familiar with the matter.

The amount is significantly higher than the foreign-currency resources mobilised by other public-sector banks and also exceeds the figures reported by several leading private-sector lenders.

SBI Well Ahead Of Other PSU Banks

Among state-owned banks, Bank of Baroda has raised around $273 million, while Canara Bank and Punjab National Bank (PNB) have mobilised about $80 million each, people aware of the developments said.

The figures reflect foreign-currency resources raised up to last Friday and were presented to the Finance Ministry during a recent review meeting.

Overall, public-sector banks had mobilised less than $3 billion under the RBI's scheme by that time, although bankers indicated that inflows have picked up in recent days after some lenders introduced new deposit offerings aimed at overseas customers.

Banks Target NRI Deposits

During the review meeting earlier this week, Finance Minister Nirmala Sitharaman asked public-sector banks to deepen their engagement with the Indian diaspora and introduce innovative products to attract more foreign-currency deposits.

Bank executives reportedly informed the ministry that their immediate focus is on strengthening foreign-currency resources before expanding Foreign Currency Non-Resident (Bank) [FCNR(B)] deposit mobilisation. According to bankers, this approach offers greater flexibility in designing leveraged products for high-net-worth customers.

Some lenders have already introduced leveraged deposit structures. Under these offerings, banks provide loan facilities of around $9 million at interest rates of roughly 5.8%, while offering about 6.5% on FCNR(B) deposits when customers invest $1 million of their own funds.

RBI Scheme Spurs Overseas Fund Raising

The RBI announced the temporary foreign-currency mobilisation window in early June, prompting banks to tap overseas markets for funding. The initial rush to raise resources pushed up borrowing costs, making leveraged deposit products relatively more expensive.

According to people familiar with the matter, SBI's total mobilisation includes both overseas bond issuances and FCNR(B) deposits swapped with the RBI.

The bank, which operates more than 240 overseas offices across 29 countries, was among the earliest lenders to access international bond markets after the scheme was introduced.

Private Banks Also Raise Overseas Funds

Among private-sector lenders, HDFC Bank has mobilised about $750 million, while Axis Bank has raised nearly $800 million through bond issuances conducted by their International Financial Services Centre (IFSC) Banking Units in GIFT City.

People familiar with the matter said the proceeds are being used to support leveraged deposit products targeted at non-resident Indian (NRI) customers.

Under the RBI's special scheme, the central bank bears the hedging cost on eligible three- to five-year foreign-currency deposits while also allowing banks to borrow against these funds, making overseas resource mobilisation more attractive.

Also Read - ITC Hotels To Acquire Welcomhotel Ahmedabad For ₹155 Crore