FCNR(B) Scheme May Generate ₹5 Trn Notional Profit for Banks over Five Years
· Business · Business Standard
Indian banks could generate a notional profit of ₹5 trillion over the next five years through the Foreign Currency Non-Resident (Bank) scheme, according to market reports. The projected gains stem from favorable interest rate differentials and foreign exchange dynamics associated with these foreign currency deposits. The FCNR(B) scheme allows nonresident Indians to maintain term deposits in designated foreign currencies, shielding them from exchange rate fluctuations while offering repatriable returns. Financial institutions manage these funds by deploying them in overseas dollar assets or swapping them into rupees for domestic lending.
Why it matters
This development directly affects scheduled commercial banks managing foreign currency deposits and influences domestic liquidity and treasury yields across the Indian banking sector.
Read the original report — Business Standard
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