State-run lender Bank of Baroda (BoB) mobilised $8 billion through Foreign Currency Non-Resident (Bank), or FCNR(B), deposits under the Reserve Bank of India’s (RBI’s) special concessional swap scheme, exceeding its initial target of $4-5 billion, a person aware of the development said.
“We saw a strong response to the scheme, and it is a good success. The bank has raised $8 billion through FCNR(B). We are yet to decide where to deploy these funds,” a senior bank official said.
The sizeable mobilisation makes BoB one of the major beneficiaries of the special window, which was introduced in June to boost foreign currency inflows amid pressure on the rupee. The central bank had initially made the facility available until the end of September, but subsequently shortened the window by a month following the strong response.
When the window closed on August 31, banks had mobilised $127.2 billion in FCNR(B) deposits. Among banks that have announced their mobilisation figures, ICICI Bank had raised $17.9 billion, while RBL Bank and IDFC First Bank had mobilised $3.4 billion and $3.6 billion, respectively.
BoB entered the mobilisation exercise with a strong liquidity position. Its liquidity coverage ratio stood at 126.94 per cent during April-June, well above the regulatory requirement.
The large FCNR(B) mobilisation could provide BoB with additional funding flexibility, even as the bank is yet to determine how the funds raised through the special window will be deployed.
