What happened

Banks mobilised a large volume of foreign-currency deposits through a special Foreign Currency Non-Resident (Bank) window. The window was designed to attract deposits from non-resident Indians and help banks strengthen their foreign-currency liabilities.

The reported mobilisation of $17.4 billion matters because it shows how banks can use designated deposit products to support funding needs when domestic market conditions are strained.

Background and earlier position

Foreign Currency Non-Resident (Bank) deposits are a long-standing instrument in India’s banking and foreign-exchange framework. They allow eligible non-resident depositors to place foreign-currency funds with authorised banks, creating a liability that can help banks manage foreign-currency requirements.

In periods of pressure in domestic funding markets, banks often look for stable and diversified liability sources. Foreign-currency deposit mobilisation is one such channel because it can reduce dependence on purely domestic deposits.

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