The Reserve Bank of India’s recent measures, including liquidity support and a regulatory shift, could unlock up to $50 billion in foreign inflows, marking a significant transformation in the country’s financial landscape.
India’s banking sector may be on course to draw in close to $50 billion as the Reserve Bank of India combines liquidity support with a broader regulatory overhaul, according to a report released on Friday by Uniqus Consultech. The consultancy said banks have already raised $36.7 billion through the RBI’s FCNR(B) deposit window, and industry estimates suggest the total could rise towards the $50 billion mark before the special facility expires.
The FCNR(B) measures have been designed to make foreign-currency deposits more attractive for non-resident Indians by lowering hedging costs and allowing lenders greater freedom on pricing. Business Standard reported in June that the RBI temporarily removed interest-rate ceilings on fresh FCNR(B) deposits with three- to five-year maturities until September 30, 2026, a move aimed at encouraging inflows and supporting foreign exchange reserves. Indian Express has also noted that banks can swap these deposits with the central bank at a concessional rate, effectively offsetting the hedging expense.
Uniqus said the RBI’s recent actions point to a wider shift in supervision, one that now spans liquidity, credit risk, capital adequacy, customer conduct and artificial intelligence governance. Sagar Lakhani, a partner at the consultancy, said the regulator was moving beyond traditional prudential oversight towards a framework focused on capital strength, risk management and technology controls. He added that banks able to align those areas would be best placed to manage the transition.
The report said the move towards an expected credit loss framework and revised Basel III credit-risk rules marks one of the biggest changes in Indian banking regulation in years. It said lenders are already being forced to rethink loan pricing, capital allocation, profitability and portfolio risk. Another estimate cited in the report suggests India’s capital account surplus could widen to about $108 billion, compared with just $2 billion in the previous year, while the balance of payments could swing to a $64 billion surplus in FY27 from deficits in FY26 and FY25.
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