SBI expects to raise $10 billion in FCNR(B) deposits, targets 14-15% credit growth in FY27

State Bank of India (SBI) expects to mobilise $10 billion through Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, Chairman C.S. Setty said at a media briefing, indicating strong response from overseas Indians to the bank's foreign currency deposit schemes.

The country's largest lender has already raised $6 billion in FCNR(B) deposits and expects the total mobilisation to touch $10 billion in the coming months. The deposits are expected to strengthen the bank's foreign currency resources and support its funding requirements.

On the domestic business outlook, Setty said SBI expects credit growth of 14-15% in FY2026-27, reflecting continued demand for loans across retail, corporate and other segments. The bank projects deposit growth of 10-11% during the financial year, broadly in line with its funding strategy.

Despite competition for deposits in the banking sector, the SBI chairman said the bank will not price bulk deposits aggressively, indicating that it does not intend to offer significantly higher interest rates merely to attract large-ticket deposits. The strategy reflects SBI's focus on maintaining a balanced cost of funds while sustaining deposit mobilisation through its wide retail franchise.

SBI's outlook comes at a time when banks are balancing credit demand with funding needs, while also seeking to maintain margins amid evolving interest rate and liquidity conditions. The planned increase in FCNR(B) deposits is expected to provide additional foreign currency liquidity while supporting the bank's overall funding profile.

SBI leads FCNR(B) mobilisation

SBI has emerged as the largest mobiliser of FCNR(B) deposits under the RBI's special scheme aimed at attracting foreign currency inflows from NRIs. The bank's extensive overseas presence and large NRI customer base have helped it garner the highest amount of FCNR(B) deposits among lenders. Other public sector banks have also witnessed healthy mobilisation, collectively outperforming several private sector banks.

The RBI introduced the special initiative in June by temporarily removing the interest rate ceiling on fresh FCNR(B) deposits with maturities of three to five years. It also launched a concessional dollar-rupee swap facility, enabling banks to lower hedging costs and offer more competitive returns to NRI depositors.

The mobilisation window for fresh FCNR(B) deposits remains open until September 30, while the RBI's swap facility will continue until October 16, allowing banks to continue raising overseas funds under the special arrangement.

RBI sees strong NRI inflows continuing

The RBI has ruled out any immediate plans to end the scheme before its scheduled closure. Speaking after the latest Monetary Policy Committee (MPC) meeting, RBI Governor Sanjay Malhotra said there is "no proposal under consideration" to prematurely discontinue the initiative and expressed confidence that healthy inflows from NRIs will continue over the coming weeks.

The central bank launched the scheme to strengthen foreign exchange reserves, support the balance of payments and provide stability to the rupee. RBI data showed that special foreign exchange measures had attracted $40.81 billion by July 31, with FCNR(B) deposits accounting for the largest share. Several banks, including HDFC Bank and ICICI Bank, have also raised FCNR(B) deposit rates to attract more overseas deposits.