PNB eyes upto $3 billion FCNR inflows after RBI measures; sees boost to NIMs

State-run lender Punjab National Bank (PNB) expects to mobilise $2.5-3 billion through Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits following the Reserve Bank of India's recent measures aimed at attracting foreign currency inflows.

Speaking to CNBC-TV18, MD & CEO Ashok Chandra said the RBI's steps are "highly positive" for banks and could help the banking sector collectively mobilise $35-40 billion through FCNR(B) deposits.

Chandra noted that there is currently a 3-3.5% gap between domestic deposit rates and FCNR(B) deposit rates, with domestic deposit rates around 6.5%. It added that interest rates on FCNR(B) deposits are likely to increase, though the bank is awaiting the RBI's circular before taking a final decision on the rates it can offer.

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The PNB CEO said higher FCNR(B) rates could attract overseas deposits, while external commercial borrowing (ECB) inflows are also expected to improve.
The lender highlighted that FCNR(B) deposits would be exempt from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements, a move it said could support net interest margins (NIMs) and improve lending flexibility.

 

#OnCNBCTV18

| Ashok Chandra of #PNB says, RBI's FCNR(B) measures could provide a meaningful boost to the banking sector

✅ FCNR(B) deposits exempt from CRR & SLR
✅ Long-term deposits to strengthen system liquidity
✅ Supportive for bank marginn
✅ Overseas deposit inflows… pic.twitter.com/Il4OU9l6xH

— CNBC-TV18 (@CNBCTV18Live) June 8, 2026

According to the bank, deposit costs are expected to decline, leading to an improvement in both net interest income (NII) and NIMs going forward. It added that the banking system would benefit from a larger pool of long-term deposits as a result of the FCNR(B) initiative.

On asset quality, Ashok Chandra said it is seeing no signs of stress in its loan book, with growth remaining strong across segments. The bank said its MSME advances grew 20% and are expected to expand by more than 20% during the current year.