HDFC Bank raises nearly $12 billion through FCNR-B deposits under RBI swap window

HDFC Bank has raised close to $12 billion through Foreign Currency Non-Resident (Bank) [FCNR-B] deposits under the Reserve Bank of India’s concessional swap window, according to sources.

“The bank has garnered $11.5 billion to $12 billion from the FCNR-Bs under RBI’s concessional swap facility,” sources told CNBC-TV18.

The deposits were mobilised at an interest rate of 6.25%, the sources said.

The RBI introduced the concessional swap facility to encourage banks to mobilise FCNR-B deposits and boost foreign-currency inflows into the country. Under the facility, banks can raise FCNR-B deposits and swap the foreign currency with the RBI at a concessional rate. The swap cost on these deposits, expected to be around 3% per annum, is borne by the Reserve Bank of India.

Comments from HDFC Bank are awaited.

The deposits are expected to help lower HDFC Bank’s credit-to-deposit (CD) ratio substantially. The ratio had surged following the merger with its erstwhile parent, HDFC Ltd, and the bank has since been gradually bringing it down.

Also Read: RBI forex swap pulls in whopping $136.4 bn, FCNR(B) deposits make up 93%

Separately, RBI data shows that banks collectively mobilised around $127 billion through FCNR-B deposits under the concessional swap window, highlighting the strong response from lenders to the central bank’s initiative.

The move comes as the RBI seeks to strengthen foreign-currency liquidity and support the rupee amid external-sector pressures.