HSBC tops FCNR(B) deposits raised with $6.1 billion so far, SBI 2nd at $4.1 billion

Behind HSBC is SBI in second place with $4.12 billion. ICICI Bank is third, having raised $3.7 billion. In fact, four of the top-seven (including ICICI Bank) are private banks, with Kotak Mahindra Bank, Axis Bank, and HDFC Bank each raising $1.41 billion-$1.66 billion so far.

This is the first time bank-wise data on FCNR(B) deposits has been made available, with the RBI only giving overall numbers.

Private banks as a category have raised the most FCNR(B) deposits at $10.73 billion, followed by public sector banks at $8.84 billion and foreign banks at $8.37 billion.

Small finance banks have raised a marginal $49.6 million, while co-operative banks have managed a near-negligible $0.7 million, the data showed.

The numbers are calculated from the outstanding FCNR(B) deposit data as on June 5 and July 30 provided by Minister of State for Finance Pankaj Chaudhary in response to a question in the Lok Sabha on Monday. The FCNR(B) concessional swap window was announced on June 5 and became operational on June 8.

In total, the data provided by Chaudhary suggests the outstanding FCNR(B) deposits had increased by $27.99 billion as on July 30. This is well below the $36.73 billion as on July 31, disclosed by the RBI on August 1. It was not immediately clear why the two numbers were so different. The Ministry of Finance has been approached for a clarification.

When asked if the government had estimated the cost of the concessional swap facility on the FCNR(B) deposits, Chaudhary said the potential cost “would depend on the quantum of foreign exchange mobilised, the maturity of the swaps and exchange rate as well as the forward premia at the time of the swap”.

“Further, RBI has well defined risk identification and mitigation measures in place for managing the country’s foreign exchange reserves,” the MoS added.

Announced on June 5 as part of a larger package to attract foreign capital, the FCNR(B) deposit swap facility has helped stabilise the rupee’s exchange rate, which was in freefall starting late 2025 on account of the US’ tariffs, India’s lack of exposure to the global AI investment boom, and the US and Israel’s attacks on Iran in late February that led to the closure of the Strait of Hormuz. This hit investor sentiment hard as global energy prices surged due to the importance of the key waterway.

While the inflows since June 5 have helped, the rupee has not strengthened much and is up only 0.5% against the US dollar since its close on June 4. This is due to a variety of reasons, including the reemergence of tensions between US and Iran over the second half of July, which forced the RBI to sell dollars to contain exchange rate volatility.

The central bank, according to economists, may also be looking to lower its forward position, which refers to the amount of dollars it has sold in the forward market. Selling dollars in this market is advantageous as it allows the RBI to stop the rupee from falling without having to sell dollars immediately.

At the end of June, it had sold $103 billion on a net basis in the forward market, only slightly lower than the all-time high $107 billion at the end of May. This means it must provide $103 billion in the future. Data shows around $9 billion of this needs to be given in July itself.

Hedging activity by banks, too, may have played a role in the reduced visible impact of FCNR(B) deposit inflows. With the RBI only bearing the exchanging rate risk for the principal amount of these deposits, banks must protect their dollar interest payments from any currency risk. So, banks are hedging their interest payment-related exchange rate risk, which raises demand for dollars in the future – and puts pressure on the rupee.