S&P Global Ratings on Monday said the USD 127 billion mobilised by Indian banks through a special deposit scheme to attract US dollars is a “shot in the arm” for Indian banks as it has eased the tough funding conditions and boosted liquidity.
Indian banks raised a record USD 127 billion in deposits through foreign currency non-resident bank (FCNRB) accounts between June 8 and August 31, 2026.
S&P said the amount is equivalent to about 4.5 per cent of the banking system’s deposit base as of March 31, 2026.
“India’s banks have received a shot in the arm. Favourable rates mobilised the country’s diaspora to channel large deposits back home. We see this as broadly positive.
“The momentum has eased the tough funding conditions, in which credit growth has exceeded deposit growth for the past four years,” it added.
To attract foreign capital, the Reserve Bank of India (RBI) between early June and August absorbed the full hedging cost for the principal on these 3-5 year tenor …
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