RBI Shortens Swap Window, Banks to Seek Bridge Loans Abroad
· Business · Economic Times
RBI shortened the swap‑support window for overseas deposits to end in less than two weeks, prompting banks in Mumbai to consider borrowing short‑term funds overseas. Lenders plan to raise bridge loans to finance leverage for FCNR‑B clients until the August deadline. These short‑term borrowings will later be replaced by longer‑term loans or bonds, creating a temporary mismatch between foreign deposits and bank borrowings. A senior private‑sector executive said banks had prepared for a September‑30 deadline and are now seeking short‑term solutions. Overall foreign borrowing by banks is expected to be lower than earlier estimates.
Why it matters
The move changes how banks manage liquidity and the cost of overseas funding, which can affect the interest rates offered to FCNR‑B depositors and the overall liquidity profile of Indian banks.
Read the original report — Economic Times
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