Bank of India targets $1.2 billion in FCNR (B) deposits

Public sector lender Bank of India is targeting $1.2 billion in Foreign Currency Non-Resident [FCNR (B)] deposits, which should help it reduce cost of funds by around 50-60 basis points in the current financial year.

The lender has already raised close to $200 million from FCNR (B) deposits, according to Bank of India's MD and CEO Rajneesh Karnatak.

"We are seeing lot of traction and it is coming across geographies," he noted.

The bank is getting FCNR (B) deposits from markets such as Canada and the United States, UK, Singapore, Hong Kong and even Japan, Karnatak pointed.

The Reserve Bank of India had announced a special window for banks to raise FCNR (B) deposits till September 30,2026, and swap them at concessional rates as it looked to raise its forex reserves.

Banks cumulatively have so far raised around $17.40 billion via FCNR (B) deposits, RBI said earlier this week.

Meanwhile, Bank of India is seeing strong growth in credit with even corporate loan growth in double digits. It still expects global advances to grow 15-16 per cent in the current financial year ending March 2027. Deposits are seen growing 13-14 per cent.

Bank of India has rolled out a campaign targeting deposit mobilisation in Rs 3 crore and up to Rs 25 crore range. The bank is seeing good traction there and is trying to optimise its overall deposits to fund the credit growth, said Karnatak.

The bank is offering interest rates in the range of 6.25 per cent to 6.50 per cent for FCNR (B) deposits. In comparison, the bulk deposit rates are currently around 7 per cent.

"So, definitely there will be a saving of somewhere around 50 to 60 basis point on this FCNR funds which we will get," Karnatak noted.

Bank of India reported a net profit of Rs 3,068 crore in the April-June quarter, up over 36 per cent from a year ago. Net interest income during the period was up 12.6 per cent to Rs 6,833 crore.

In the first quarter, it's global deposits increased by 14.90 per cent and advances increased by 18.64 per cent.

Its gross non-performing assets have improved to 1.81 per cent in June 2026, from 2.92 per cent in June 2025. It's net NPAs also improved to 0.51 per cent from 0.75 per cent.

In the backdrop of El Niño, which is expected to impact the monsoon season this year, Karnatak said the lender was watching the situation very closely. So far there has been no impact on its asset quality, but if there is any impact, it could be in the second quarter, felt Karnatak.