The Reserve Bank of India (RBI) on Friday reviewed the implementation of its recent foreign exchange and financial sector initiatives, including the concessional FCNR(B) swap facility announced last week, at a meeting with managing directors and CEOs of all major banks.
The meeting, chaired by Deputy Governor Rohit Jain assessed the progress of key initiatives and discussed measures to expedite their implementation. Banks had been asked to submit progress reports, including supporting data where available, ahead of the meeting.
The concessional FCNR(B) swap facility was among the key agenda items. The central bank on June 5 had allowed banks can swap fresh FCNR(B) dollar deposits with the RBI to encourage foreign currency inflows. It has also exempted incremental FCNR(B) deposits from cash reserve ratio (CRR) and statutory liquidity ratio (SLR) requirements.
Aggressively Hike Rates
The review comes at a time when banks have started raising FCNR(B) deposit rates following the RBI’s regulatory relaxations, with some lenders offering rates of over 7% on 3-5 year maturities to attract overseas deposits.
Digital Public Infrastructure
Besides the swap scheme, the RBI reviewed the pendency of export and import payment entries under the EDPMS and IDPMS systems, discussed ways to scale up the unified lending interface (ULI) and the central bank digital currency (CBDC), and assessed measures to increase retail foreign exchange transactions and cross-border trade settlements in rupees. The meeting also covered gold monetisation and metal loans, as well as measures to harness domestic stock of gold.