State Bank of India (SBI) has garnered $7.5 billion under the Reserve Bank of India’s three concessional swap schemes, accounting for almost 20% of the total mop-up by banks until July 31.
SBI has mobilised $6 billion via FCNR(B) deposits while $1.5 billion has come in through foreign currency bonds, a source said.
Some of the public sector banks, including Indian Bank, Canara Bank and Bank of Baroda, have hit the $1-billion mark in FCNR(B) deposits during this period, according to sources. While the figure for Punjab National Bank (PNB) could not be confirmed, it had reached $425 million by the middle of July. PNB has set a target of $2.5 billion under the RBI’s swap window.
Besides FCNR(B) deposits, SBI has raised $1 billion via overseas foreign currency borrowings (OFCBs) and $500 million through the unsecured floating rate note (FRN) programme in two tranches.
Most of the FCNR(B) deposits have flown in through West Asia, sources said. Initial flows from Singapore and Hong Kong have considerably slowed down due to tax concerns. A withholding tax of 10% in Singapore on loan interest earned has turned out to be a major hindrance for FCNR(B) deposit mobilisation.
SBI offers a 9x leverage on FCNR(B) deposits to its clients under the scheme. The interest rate on offer is 5.50% for three-year deposits of over $1 million and 6% for a maturity of five years.
HSBC is offering up to 19 times leverage and reportedly has mobilised over $5.5 billion. Standard Chartered is also one of the aggressive players and had crossed $2 billion by July 22, sources said.
SBI, with significant overseas presence, is best poised to lead the pack in garnering FCNR(B) deposits.
In West Asia, SBI has a network of six branches and representative offices across the region, the UAE, Bahrain, Israel and Oman.
Until July 31, banks have raised $40.82 billion in foreign exchange through the RBI’s three concessional swap schemes.
According to the latest figures put out by RBI, banks have mopped up $36.73 billion via FCNR(B) deposits, $2.58 billion has been mobilised via OFCBs and $1.52 billion in the form of ECBs.