FCNR Deposits Bring $136 Billion: Will Bank Credit Growth Rise Beyond 18%?

India’s banking system is seeing a potential liquidity boost as the RBI’s special FCNR swap window mobilises over $136 billion in foreign currency deposits. The discussion explores how rising deposits could impact domestic liquidity, bank credit growth and the broader economy. Dhananjay Sinha, CEO & Co-Head of Equities & Head of Research - Strategy & Economics, Systematix Group, explains whether loan growth can move beyond the current 18% level, how FCNRB inflows are helping cushion India’s balance of payments deficit and the RBI’s ability to support rupee stability. The conversation also looks at widening trade deficits, foreign capital flows and the possibility of renewed FII investment.