FCNR(B) deposits surge: ICICI Bank, foreign lenders claim lion's share
Synopsis
India's FCNR(B) deposit drive has handed a lopsided victory to banks with the deepest offshore reach. ICICI Bank claimed up to 18% of a $136.4 billion pool despite its normal deposit share being half that, while HSBC alone captured 22% — a result that says more about balance-sheet architecture than domestic banking muscle.
Key Takeaways
Total FCNR(B) deposits mobilised reached $136.4 billion (approximately ₹12.96 lakh crore ).
ICICI Bank mobilised $17.88 billion , capturing an estimated 18 per cent of total inflows — roughly twice its normal deposit market share.
More than 70 per cent of ICICI's mobilisation leverage came from its international balance sheet, including $9 billion in overseas loans and $3.6 billion in standby letters of credit.
RBL Bank secured approximately $3.4 billion ( 2.7 per cent share), far exceeding its normal 0.5 per cent deposit market footprint.
HSBC captured around 22 per cent of total inflows ( $6.1 billion ); Standard Chartered secured roughly 7 per cent of incremental flows.
Foreign banks' share of incremental FCNR(B) flows surged from 1–2 per cent in early June to 15–30 per cent by end of July, according to Jefferies.
India's drive to attract Foreign Currency Non-Resident (Bank), or FCNR(B), deposits has yielded a distinct group of winners — banks that paired aggressive interest rates with deep overseas balance sheets, capturing a disproportionate slice of the $136.4 billion (approximately ₹12.96 lakh crore) that flowed into the scheme. The gains, notably, had little to do with the size of a bank's domestic deposit franchise.
ICICI Bank Leads Among Private Lenders
ICICI Bank emerged as the standout performer among large private sector lenders. According to brokerage Macquarie, the bank mobilised $17.88 billion (around ₹1.70 lakh crore) in FCNR(B) deposits, translating into an estimated 18 per cent share of the total market. Motilal Oswal Financial Services (MOSL) places ICICI's share at around 14 per cent — still roughly twice its normal deposit-market footprint.
The bank's outperformance was underpinned by its international balance sheet. Macquarie estimates that more than 70 per cent of its mobilisation leverage came from its own balance sheet, including nearly $9 billion in loans from international branches and $3.6 billion in standby letters of credit issued to other banks.
RBL Bank Punches Above Its Weight
Smaller private lender RBL Bank also outperformed relative to its size. According to MOSL, RBL mobilised around $3.4 billion (approximately ₹32,000 crore), accounting for about 2.7 per cent of total FCNR(B) deposits — a figure significantly higher than its normal deposit market share of around 0.5 per cent. The bank's aggressive rate strategy appears to have compensated for its limited international branch network.
Foreign Banks Emerge as Biggest Relative Beneficiaries
Foreign banks recorded the sharpest relative gains. According to Jefferies, their share of FCNR(B) deposits climbed from around 1–2 per cent in early June to between 15 per cent and 30 per cent of incremental flows by the end of July — a striking acceleration that reflects their structural advantage in cross-border deposit mobilisation.
HSBC was among the largest individual beneficiaries. MOSL estimates the bank captured around 22 per cent of total inflows, mobilising $6.1 billion (roughly ₹58,000 crore) as of 30 July. Jefferies' bank-wise data showed HSBC's incremental deposits reaching approximately $6.14 billion by end of August. Standard Chartered also secured around 7 per cent of incremental flows, according to the same data.
What the Data Reveals About the Scheme's Architecture
The distribution of FCNR(B) gains underscores a structural reality: banks with robust offshore infrastructure — international branches, foreign-currency loan books, and standby credit facilities — were better positioned to source and deploy these deposits than those relying solely on domestic networks. This comes amid the Reserve Bank of India's (RBI) broader effort to bolster India's foreign exchange reserves and manage external account pressures.
Analysts at BofA Securities also flagged the scheme's outcomes in their coverage, reinforcing the view that the inflow concentration was not accidental but a function of competitive rate-setting and balance-sheet readiness. With the scheme's mobilisation phase drawing to a close, attention will now shift to how banks manage the maturity and repricing risk embedded in these high-cost foreign-currency liabilities.
Point of View
And foreign banks collectively jumping from 1-2% to 30% of incremental flows, signals that the RBI's scheme design inadvertently tilted the playing field toward institutions with global infrastructure. The more pressing question now is maturity risk: these are high-cost, foreign-currency liabilities with fixed tenors, and how banks manage the repricing cycle will test whether the short-term inflow win translates into durable balance-sheet strength.
NationPress
5 Sept 2026
Frequently Asked Questions
What is the FCNR(B) deposit scheme and why did India push it?
The Foreign Currency Non-Resident (Bank) or FCNR(B) scheme allows Indian banks to accept fixed deposits from non-resident Indians in foreign currencies, helping bolster India's foreign exchange reserves. The latest push was part of the Reserve Bank of India's effort to manage external account pressures and attract stable foreign-currency inflows.
How much did ICICI Bank mobilise under the FCNR(B) scheme?
ICICI Bank mobilised approximately $17.88 billion (around ₹1.70 lakh crore), capturing an estimated 18 per cent share of total FCNR(B) inflows according to Macquarie. Motilal Oswal Financial Services estimates its share at around 14 per cent — still roughly twice its normal deposit market footprint.
Why did foreign banks gain such a large share of FCNR(B) deposits?
Foreign banks' share of incremental FCNR(B) flows surged from around 1-2 per cent in early June to between 15 per cent and 30 per cent by end of July, according to Jefferies. Their structural advantage in cross-border deposit mobilisation — including global branch networks and foreign-currency balance sheets — allowed them to source and deploy these deposits more efficiently than domestic-only lenders.
How did HSBC perform in the FCNR(B) scheme?
HSBC was among the biggest individual beneficiaries, capturing around 22 per cent of total FCNR(B) inflows and mobilising $6.1 billion (roughly ₹58,000 crore) as of 30 July, according to MOSL. Jefferies' data showed HSBC's incremental deposits reaching approximately $6.14 billion by end of August.
What happens now that the FCNR(B) mobilisation phase is ending?
Analysts note that attention will shift to how banks manage the maturity and repricing risk embedded in these high-cost foreign-currency liabilities. Banks that aggressively mobilised deposits at elevated rates will need to ensure their asset deployment matches the tenor and currency profile of these obligations to avoid balance-sheet stress.
