Nirmala Sitharaman calls for greater NRI outreach to boost foreign currency inflows

New Delhi: Finance minister Nirmala Sitharaman on Monday asked banks to intensify outreach to non-resident Indians (NRIs), introduce innovative deposit products and sustain the momentum of foreign-currency inflow mobilisation.

She reviewed progress under the Reserve Bank of India (RBI) swap facility schemes for foreign currency non-resident (bank) [FCNR(B)] deposits, external commercial borrowings (ECBs) and overseas foreign currency borrowings (OFCBs) swap initiatives announced in June, the finance ministry said in a statement.

The government, along with the RBI, announced these measures as part of the strategy to bolster forex reserves and support the rupee amid the West Asia crisis.


According to industry estimates, banks and financial institutions are expected to raise up to $70 billion through these modes. A recent report by brokerage firm Jefferies said that with current forex reserves of $682 billion, substantial flows can support domestic liquidity, forex reserves and exchange rate.

The finance minister asked banks to sustain the momentum during the remaining period of the schemes and maximise utilisation of financial services and institutional infrastructure available at GIFT City. While FCNR(B) deposits are eligible under the scheme until September 30, ECBs and OFCBs are eligible until December 31.

In its statement, the finance ministry said that managing directors of public sector banks and financial institutions have reported significant interest from NRIs residing in Singapore, Hong Kong, West Asia, the United Kingdom, the United States and other overseas jurisdictions.

"These initiatives have received an encouraging response from the Indian diaspora abroad, with healthy interest across FCNR(B), ECBs, and OFCBs," the ministry said, adding that lenders expressed confidence that ECB mobilisations would gather stronger traction during the third quarter of this fiscal year.

Banks also reported that they have put in place customised outreach strategies, including digital channels, to engage with the NRIs and enhance deposit mobilisation. They said that FCNR(B) deposit mobilisation had shown a clear accelerating trend, supported by attractive returns being offered by banks.

The RBI, which was represented in the meeting by a deputy governor, assured that the central bank is actively supporting banks and financial institutions in mobilising deposits and facilitating eligible borrowings, the statement said. The banks also outlined their plans to capitalise on the positive sentiment and accelerate deposit mobilisation during the remainder of the scheme, it added.