Bank Deposits Hit Record ₹269.4 Lakh Crore as RBI’s FCNR Scheme Spurs Inflows

Deposits in India's banking system have accelerated sharply over the past three fortnights and rose to a record high, helped largely by the conversion of foreign-currency inflows mobilised under the Reserve Bank of India's (RBI) special deposit schemes, as per multiple reports. Reports showed that banking system deposits increased by a cumulative Rs 11 lakh crore over the three fortnights ended July 31. This follows a net decline of Rs 3.87 lakh crore in deposits between April 1 and June 15.

The turnaround comes after the RBI in June unveiled concessional swap windows for foreign currency non-resident (FCNR) deposits and encouraged banks and state-owned entities to tap cheaper overseas funding sources. The measures have attracted inflows of nearly $41 billion by the end of July, RBI data showed. "The conversion of dollars into rupees has gained pace, which is the major reason for the recent boost in deposits," the report said, citing a trader at a state-run bank.

As a result, total deposits in the banking system rose to a record Rs 269.4 lakh crore as of July 31, an increase of Rs 7.1 lakh crore in the first four months of the current financial year. The strong deposit accretion comes as lenders seek to narrow the gap between credit growth and deposit growth, a key concern for the banking system over the past year. Higher deposit growth is expected to provide banks with additional funding flexibility and support lending activity without putting further pressure on deposit rates, dealers said. Separately, a report noted that FCNR(B) inflows and related measures from the RBI are expected to generate $90–95 billion of capital inflows in FY27.

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