PSBs expect to raise $30 bn from RBI’s overseas deposit scheme, sources say

RBI’s overseas deposit scheme ends on September 30.
| Photo Credit:
FRANCIS MASCARENHAS

Senior government officials were informed by public sector banks that they anticipate raising close to $30 billion via the RBI’s subsidized dollar‑deposit facility, according to five bankers knowledgeable about the situation who spoke to Reuters.

The heads of state‑run banks disclosed this estimate during a meeting with Finance Minister Nirmala Sitharaman and other finance ministry officials earlier this week, two sources confirmed.

“State‑run banks have provided figures on how much dollar funding each expects to obtain through the scheme’s tenure,” said one banker directly involved.

“Larger institutions project inflows of roughly $4 billion to $5 billion, whereas smaller banks aim for $1 billion to $2 billion.”

The bankers asked to stay anonymous because the talks were private. The Finance Ministry did not respond to a Reuters request for comment.

On June 5, the RBI unveiled a zero‑cost foreign‑exchange swap mechanism for funds gathered from non‑resident Indians, enabling banks to provide better returns on those deposits. The program ends on September 30.

Earlier this week, Reuters reported, citing sources familiar with the issue, that India has drawn about $10 billion in inflows via the central bank’s special deposit scheme.

The amount raised to date is only a small portion of the $40 billion‑to‑$70 billion inflow range projected by analysts.

“The launch has been gradual, yet we are confident of securing $2 billion through the scheme by September, with the bulk of the inflow expected from the Gulf and Singapore,” said Binod Kumar, managing director and CEO of Indian Bank, which has so far raised roughly $150 million.

On June 23, the central bank clarified that banks may lend against these deposits and place a lien on them, allowing leverage that enhances the appeal of the program.

Inflows have risen since then, but officials anticipate that most of the funding will arrive later in the period, mirroring the pattern observed in 2013, according to three of the five bankers.

Published on July 17, 2026