FCNR Inflows Surge To $137 Billion: Why It Could Boost Banks And Support The Rupee

India’s FCNR deposit drive has exceeded expectations, with total inflows reaching around $137 billion. Devarsh Vakil, Head of Prime Research, HDFC Securities, explains how these massive inflows could boost banking liquidity, ease pressure on the rupee and support Indian financial markets. He discusses how stronger foreign currency inflows could reduce the deposit competition among banks and ease pressure on net interest margins. With system credit growth already around 17%, banks could have more room to lend and benefit from rising credit demand. The discussion also explores how currency stability and foreign portfolio flows could support Indian equities.