Indian Bank, led by MD & CEO Binod Kumar, is chasing a $2 billion goal through foreign currency non-resident (FCNR(B)) deposits, with a surprising twist: the main hurdle isn’t a lack of dollars, but rather getting the right price.
The state-owned bank has so far secured $140 million under the Reserve Bank of India’s (RBI) special FCNR(B) deposit window, which offers Indian banks a chance to raise foreign currency deposits from non-resident Indians (NRIs). Indian Bank is one of several lenders looking to tap into this program, which was launched to help reduce the country’s reliance on short-term dollar borrowing.
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FCNR(B) deposits: |
$2 billion target |
$140 million raised so far |
Pricing, not the availability of dollars, is the main challenge for Indian Bank. This is a significant shift from the usual concerns surrounding international borrowing, which often revolve around access to foreign currency rather than getting a good deal on it.
# What this means
This development highlights the complexities of international lending in a post-pandemic world. With central banks around the world implementing monetary policies to support their economies, the traditional rules of international borrowing are being rewritten. For Indian Bank and other lenders, it’s no longer just about getting their hands on dollars, but about securing favorable terms that make sense for their business.
Indian Bank’s experience with the RBI’s FCNR(B) deposit window is a case in point. By focusing on pricing, the bank is showing that it’s willing to think outside the box when it comes to international borrowing. This could be a winning strategy for other lenders looking to tap into the program, or for investors looking to park their dollars in Indian banks.
