Indian Banks Rise On RBI Foreign Deposit Push
Indian banking stocks gained on Tuesday after the Reserve Bank of India issued detailed guidelines for a concessional foreign exchange swap facility aimed at attracting overseas foreign currency deposits and supporting dollar inflows.
Indian Banks Lead Market Gains
The Nifty Bank index rose more than 1% in morning trade, outperforming the broader market. The Nifty 50 also traded higher, but banking and financial stocks led the gains.
Among major lenders, ICICI Bank emerged as one of the stronger performers, while State Bank of India and HDFC Bank also traded in positive territory. The rally came after banking shares had seen mixed movement in recent sessions.
RBI Foreign Deposit Initiative
The RBI’s concessional swap facility will be available until September 30. It is designed to compensate banks for hedging costs linked to foreign currency non-resident deposits with maturities of three to five years.
The move is expected to make such deposits more attractive for non-resident Indians and help banks raise foreign currency funds at a more stable cost.
Rupee Pressure And Dollar Inflows
The initiative is part of a broader effort to increase foreign capital inflows at a time when the rupee remains under pressure from crude oil prices, foreign equity outflows and global uncertainty.
Market participants welcomed the additional clarity from the central bank, as stronger foreign currency deposit mobilisation could improve banking sector liquidity and support India’s external balance.
