Neutral impactEconomy
FCNR(B) mobilisation starts slow; banks remain optimistic on September-end targets
BusinessLine 20 hrs ago·19 Jul 2026, 4:32 pm
Indian banks have resumed the mobilisation of Foreign Currency Non-Resident (FCNR(B)) deposits, a popular savings product for Non-Resident Indians (NRIs). However, initial signs indicate a slow start to this fiscal year's campaign. While banks are actively reaching out to potential investors, the response has been muted so far.
This cautious behaviour is primarily driven by a few key factors. Tax considerations are playing a significant role, as the taxability of these deposits has changed. Additionally, the gap between Indian and US interest rates has narrowed, reducing the incentive to park funds abroad. Furthermore, NRIs are finding attractive investment opportunities closer to home, which is diverting their capital away from these foreign currency accounts.
Banks remain optimistic that they will meet their targets by the end of September. They are banking on a pickup in interest from NRIs as the quarter progresses. For now, investors should monitor the pace of these collections to gauge the overall sentiment among the Indian diaspora.
Key takeaways
- Category: Economy.
- Assessed as a significant, market-relevant update.
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