Banks, RBI set to gain ₹5.5 lakh crore from FCNR(B) deposits

Deploying roughly $100 billion in global assets returning close to 4 per cent annually could help RBI earn nearly $20 billion over five years.
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The latest push under the FCNR(B) scheme has drawn wide attention because of its size, with deposits reaching close to $127 billion in just three months.

According to SBI Research, the scheme could create notional gains of about ₹5.5 lakh crore for banks and the Reserve Bank of India.

Soumya Kanti Ghosh and the SBI Research team said that since FCNR(B) deposits are hedged through the RBI’s swap arrangement, future currency movements do not add fresh losses to the same exposure. They argued that fears of losses due to exchange rate depreciation effectively count the same risk twice.

Report’s estimate

The report estimates that the additional liquidity created through FCNR(B) deposits could support nearly ₹25 lakh crore in extra credit across the banking system. With an effective lending yield of around 7.5 per cent, banks could generate a net interest margin of roughly ₹1 lakh crore each year, leading to a notional gain of about ₹5 lakh crore over five years.

The RBI is also expected to benefit from the move. By placing around $100 billion in global assets that yield approximately 4 per cent annually, the central bank could earn close to $20 billion over five years. After factoring in estimated hedging costs of $15 billion, the RBI could still achieve a net gain of around ₹50,000 crore.

Beyond direct earnings, the scheme is expected to improve systemic liquidity, support credit expansion and strengthen financial stability. SBI Research says the FCNR(B) initiative should be seen not as a liability, but as a major financial and macroeconomic opportunity for banks and the RBI.

Published on September 18, 2026