Times Top News

Times Top News

Banks dangle mega returns to lure NRIs to FCNR(B) deposits

Banks dangle mega returns to lure NRIs to FCNR(B) deposits

by | Jun 16, 2026 | Business


In a bold push to attract global Indian capital, Indian banks are spotlighting their FCNR(B) deposit scheme with a headline-grabbing promise: Dollar returns of up to 14 per cent annualised and paired with a leverage facility. Aimed squarely at high-net-worth non-resident Indians, the offering blends fixed dollar deposits with access to loans against those deposits, amplifying potential gains.

Indian banks with strong overseas presence such as State Bank of India, Bank of Baroda, Bank of India, ICICI Bank, Axis Bank and HDFC Bank are better placed to attract Foreign Currency Non-Resident (Bank) deposits under the RBI’s limited period swap window.

leverage advantage

A large bank has circulated a message to its NRI clients offering a scheme that requires a minimum investment of $1 million, locked for three-five years. Base deposit rates range between 5.50 per cent and 6.00 per cent, but the real draw lies in the bank’s leverage option, allowing investors to borrow up to nine times their deposit. By reinvesting borrowed funds, the bank projects significantly higher annualised yields even after accounting for loan costs.

Positioned as a dollar-denominated instrument, the product eliminates exchange rate risk on maturity while ensuring full repatriation of principal and interest, key concerns for overseas investors.

The bank’s overseas branches as well its overseas subsidiaries’ branches can give a loan of $9 million on a fresh deposit of $1 million. The proceeds of the loan can be placed as a fresh FCNR (B) deposit at a higher interest rate that banks are currently offering for a limited period. Effectively, the bank now has a $10 million FCNR (B) deposit on which it has given a $9 million loan.

high stakes play

The bank is clearly pitching a sophisticated, high-stakes play for NRIs seeking to maximise returns in a stable currency framework.

Banks’ overseas branches as well their overseas subsidiaries branches can extend loans to NRIs based on the strength of their existing/ new FCNR (B) deposits in India.

“The bank not only earns interest on the loan it has given to the NRI overseas, it also earns interest on the rupee loans it has extended in India from the $10 million deposit created free of exchange rate risk. This is a win-win for the depositor as well as the bank,” said a senior official with a private sector bank.

Banks recently sharply upped the interest rates on FCNR (B) US dollar deposits in the 3/5-year tenor. The interest rates have been increased to 6-7 per cent from the earlier 3 per cent levels.

This upward revision in interest rates comes in the wake of the RBI, as part of its June 5 measures to attract dollars to stabilise the rupee, announcing that it will bear the full hedging cost on fresh 3/5-year FCNR (B) deposits that banks mobilise up to September 30.

Moreover, such deposits have been exempted from statutory pre-emptions such as the cash reserve ratio and the statutory liquidity ratio, enabling banks to deploy the entire proceeds as loans.

Karthik Srinivasan, Group Head – Financial Sector Ratings, ICRA, observed that for larger banks, which have a large overseas branch presence, it becomes easier to service the NRI clients.

“Some of the banks have set up offices in GIFT City. Maybe, some money will flow in from there. Again, it depends how things play out. But clearly, it’s easier for banks which have overseas branches, which is what we saw in the past as well,” he said.

Among Indian banks’, State Bank of India (SBI) has the largest overseas presence, with 245 offices (including branches and offices of subsidiaries) spread across 29 countries.

The maximum interest rate SBI is offering on FCNR (B) deposits is on the 5-year tenor. For a deposit up to $1 million and above $1 million, it is quoting an interest rate of 5.75 per cent and 6 per cent, respectively. The earlier rate was 3.05 per cent.

SBI economists expect the banking system to mop up $40-45 billion through the FCNR (B) deposit route.

Published on June 16, 2026



Source link

Canara Bank launches new FCNR(B) Special Deposit Scheme for NRIs

Canara Bank launches new FCNR(B) Special Deposit Scheme for NRIs

by | Jun 16, 2026 | Business


Canara Bank has launched its FCNR(B) Special Deposit Scheme to help Non-Resident Indians (NRIs) grow their savings while investing securely in India. As per the bank, customers can now earn an interest rate of up to 6.50 per cent p.a. on USD deposits, with a flexible tenure ranging from 3 years to 5 years. The deposit carries a lock-in period of one year.

This announcement comes in line with the recent measures announced by the Reserve Bank of India (RBI) to encourage foreign currency inflows into the nation.

Under the Special Deposit Scheme, customers can earn interest on deposits denominated in foreign currencies, with high interest rates and capital protection features. This scheme is offered in leading foreign currencies such as the US dollar (USD), British pound sterling (GBP), euro (EUR), Canadian dollar (CAD) and Australian dollar (AUD).

Besides, the interest earned from the FCNR(B) deposits is exempted from tax in India, which makes it an ideal investment choice for NRIs. Under this scheme, Canara Bank is also providing the facility of a loan against the FCNR(B) deposits.

Speaking about this scheme, Bhavendra Kumar, Executive Director, Canara Bank, said, “The FCNR(B) Special Deposit Scheme is tailor-made to provide our NRI customers with the benefit of earning competitive interest on their foreign currency deposits. This scheme is very convenient, tax-efficient, and easy to withdraw funds, making it an excellent investment option for our customers abroad.”

Published on June 16, 2026



Source link

Ageing population and rising debt could push Tamil Nadu towards a fiscal trap, says White Paper

Ageing population and rising debt could push Tamil Nadu towards a fiscal trap, says White Paper

by | Jun 16, 2026 | Business


TN Finance Minister N. Marie Wilson (right) and M.A.Siddique, Additional Chief Secretary, Finance Department, Govt of Tamil Nadu releasing a White Paper on the Fiscal Management of Tamil Nadu, in Chennai.
| Photo Credit:
Bijoy Ghosh

Tamil Nadu’s fiscal position has deteriorated substantially since 2021 with rising debt, record revenue deficits, slowing own-tax revenue growth, and growing committed expenditure burdens, a white paper on state finances released by the new TVK Government on Tuesday, said.

Plugging revenue leakages with better administration is a key solution that the government lays down as it sets out to improve the financial position of the State while delivering on its welfare-heavy poll promises.

Among its six principal findings is that the State’s outstanding debt has grown at a CAGR of 14.3 per cent in the last five years and is at ₹10 lakh crore in FY26. Off-budget contingent liabilities and guarantees push this total fiscal exposure to Rs. 13.18 lakh crore, it adds.

The debt-to-GSDP ratio at 28.3 per cent is consistently elevated and is higher than peer states.

Further, committed expenditure -salaries, pensions and interest- have gone up from about 60 per cent of revenue receipts to 64 per cent today, making capex the casualty, it said.

The report pegs revenue deficit of FY26 at a six-year high at about 2.22 per cent of GSDP, exceeding even the Covid-affected year of FY21 in absolute terms. This was roughly 2.5 times that of Karnataka and Maharashtra.

As per the report, the widening revenue deficit since FY23 is due to various reasons introduction of new recurring commitments without parallel revenue mobilisation, deferring certain own-tax reforms, and limited focus on capex.

As for the own-tax revenue performance, the report calls it “policy and administration driven.”

“The SoTR-to-GSDP ratio stood at 5.93 per cent in FY22 and has declined in successive years to 5.45 per cent in FY26. Peer states have either recovered in the post-Covid window or maintained momentum,” it said. While peer States have improved upon their tax effort,TN did not. Measured against FY23 peak of 6.33 per cent of GDP, this comes to ₹51,000 crore of revenue foregone in the last 3 years, the report said.

The white paper calls the Interim Budget 2026-27 estimates as optimistic and off mark.

“The FY27 revenue deficit could reach roughly ₹90,500 crore against about ₹48,696 crore shown in the Interim Budget, and the fiscal deficit could approach ₹1.64 lakh crore against the ₹1.22 lakh crore budgeted,” it said.

The decline is driven by leakages and systemic corruption in revenue-collecting departments and not any structural economic disadvantage, TN Finance Minister N Marie Wilson, noted while releasing the report. We will undertake corruption-free governance, improve the revenue mobilisation by efficiency, and look at PSU reforms to get out of this situation, he said.

What makes the recovery urgent is that Tamil Nadu is ageing faster than any other large State, he added, pointing to a shrinking tax base and expanding social-security and healthcare obligations.

MA Siddique, Additional Chief Secretary, Finance Department, said their efforts will be to tide over the financial position without impacting the useful schemes.

Published on June 16, 2026



Source link

GIC Re shares tumble 6% as govt launches OFS to divest up to 5% stake

GIC Re shares tumble 6% as govt launches OFS to divest up to 5% stake

by | Jun 16, 2026 | Business


The floor price for the share sale has been fixed at ₹352 per share, representing a discount of around 9 per cent to the stock’s previous closing level ₹387.25.
| Photo Credit:
istock.com

Shares of General Insurance Corporation of India (GIC Re) fell over 7 per cent on Tuesday after the government’s offer for sale (OFS) to divest up to a 5 per cent stake in the state-owned reinsurer opened for non-retail investors.

The OFS received a strong response on the first day, fetching an overall subscription of 3.72 times. Retail investors and employees get to bid on June 17, 2026.

The stock closed 7.45 per cent lower on the NSE at ₹358.40.

The company informed stock exchanges on Monday that the Government of India plans to sell up to a 2 per cent stake, equivalent to 3.51 crore shares, through an OFS on June 16-17, 2026. The government has also retained an option to sell an additional 3 per cent stake, taking the total divestment size to as much as 5 per cent.

The OFS has been launched to help the company comply with minimum public shareholding norms.

The floor price for the share sale has been fixed at ₹352 per share, representing a discount of around 9 per cent to the stock’s previous closing level ₹387.25.

Market participants reacted negatively to the discounted share sale, with the stock witnessing selling pressure during the opening session as investors assessed the impact of the government’s stake dilution plan.

Published on June 16, 2026





Source link

Kharif pulses sowing off to a weak start, acreage down 43% till now

Kharif pulses sowing off to a weak start, acreage down 43% till now

by | Jun 16, 2026 | Business


Kharif pulses sowing faces a 43% decline as farmers await crucial rains in Karnataka and Maharashtra
| Photo Credit:
KK Mustafah

A delayed and deficient monsoon, so far, has led to a weak start for the kharif pulses sowing, with the coverage down 43 per cent as of June 12. Farmers in key producing regions of Karnataka and Maharashtra are awaiting rains to take up sowing of pulses such as tur (pigeon pea), urad (black matpe) and moong (lentils), even as the delay has triggered concerns among the growers.

As per the Agriculture Ministry data released on Tuesday, tur has been planted on 0.09 lakh hectares (lh) till June 12 across the country, down 57 per cent over the same period last year, while urad has been seeded in some 0.27 lh, trailing last year’s corresponding level of 0.35 lh by about 22 per cent. Moong has been planted on 0.69 lh, down 55 per cent from 1.54 lh.

“So far, there has been no rain. We are not sure whether the rains will arrive on time in the days ahead. Farmers are concerned about the delay in rains,” said Basavaraj Ingin, President, Karnataka Pradesh Red Gram Growers Association in Kalaburgi, a key pulses-growing region in North Eastern Karnataka. The situation is similar in adjoining parts of neighbouring Maharashtra, such as Latur and Solapur and also in Telangana, where pigeon pea is largely grown, he said.

32% deficient rain

As per the IMD data, the country as a whole has received 32 per cent deficient rain till June 15. Against a normal of 62.1 mm of rainfall, the country as a whole received 42.4 mm of rain during the period.

N Kalantri, a miller in Latur, said there were no rains in the region and sowing of tur is yet to start.

In some parts of Kalaburgi, where it had rained a few weeks ago, farmers had taken up sowing of moong. “Even that early sown crop requires rains now to survive,” Ingin said, adding that the government should start planning to rescue the farmers from the emerging situation.

Sowing of moong has taken place in parts of Gadag and Yadgir, wherever it has rained, but growers are waiting for a fresh spell to aid the crop growth, said Sujay Hubli, a miller in Gadag.

El Nino concern

“It is still a wait-and-watch situation, as there is a lot of uncertainty over rains,” said Satish Upadhyay, Hon Secretary, India Pulses and Grains Association (IPGA). However, El Nino is a concern for the main pulses-producing states such as Maharashtra, Madhya Pradesh, Gujarat and Rajasthan, he said. Though sowing can be taken up till mid-July for crops like tur and matpe, the crop will get delayed, he said.

Upadhyay said the Government is holding buffer stocks of 4.3-4.5 million tonnes of pulses, which should keep the prices under check.

Published on June 16, 2026



Source link

YouTube
Instagram
WhatsApp