India's finance minister urges banks to boost NRI outreach for foreign currency mobilization

Indian Finance Minister Nirmala Sitharaman has called on public sector banks and financial institutions to intensify their efforts in reaching out to the Non-Resident Indian (NRI) diaspora. The goal is to sustain the momentum of mobilizing foreign currency through the Reserve Bank of India's swap schemes.

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It was noted that these initiatives have received an encouraging response from the Indian diaspora abroad, with healthy interest across FCNR(B), ECBs and OFCBs.

During a meeting with managing directors and CEOs of public sector banks and financial institutions in New Delhi, Sitharaman discussed initiatives like Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, External Commercial Borrowings (ECBs), and Overseas Foreign Currency Borrowings (OFCBs) swap schemes. Banks reported an "encouraging response" from the Indian diaspora, with significant interest noted from NRIs in Singapore, Hong Kong, West Asia, the United Kingdom, and the United States.

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The banks also informed during the interaction that the International Banking Units (IBUs) at the International Financial Services Centre (IFSC), GIFT City, Gujarat, are being utilised to leverage fund mobilisation from multiple jurisdictions, including the United Kingdom, the United States, the West Asia, Hong Kong, Singapore and Southeast Asia.

Banks are offering attractive returns, including on five-year FCNR(B) deposits, supported by the suspension of the interest rate ceiling on fresh deposits. They outlined plans to accelerate deposit mobilization, expressing confidence that ECB mobilizations would gain stronger traction in the third quarter of the current fiscal year. Customized outreach strategies, including digital channels, are being employed to engage with the NRI community.

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exhorted the banks to maximise utilisation of financial services and institutional infrastructure available at GIFT City.

Furthermore, the International Banking Units at the International Financial Services Centre (IFSC) in GIFT City, Gujarat, are being utilized to tap global funds from various jurisdictions. Sitharaman exhorted the banks to maximize the utilization of the financial services and institutional infrastructure available at GIFT City. The RBI Deputy Governor assured central bank support for deposit mobilization and eligible borrowings, noting a robust daily reporting framework for transparent, real-time monitoring.

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the central bank is actively supporting banks and financial institutions in mobilising deposits and facilitating eligible borrowings