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Business News›Industry›Banking/Finance›Banking›SBI chief Setty says $127 billion FCNR inflow won’t trigger lending surge

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SBI chief Setty says $127 billion FCNR inflow won’t trigger lending surge
Synopsis

State Bank of India Chairman CS Setty addressed concerns regarding foreign currency deposit inflows. He stated these funds will be absorbed gradually over the coming months. The central bank's swap facility attracted significant foreign capital inflows. Commercial banks received substantial FCNR(B) deposits, exceeding market expectations. Setty also highlighted structural shifts towards asset tokenization in capital markets.

ANI

When asked about SBI's specific share of the mobilization, Setty declined to disclose the exact figure raised by the country's largest state-owned lender, which had set an initial target of nearly USD 10 billion.



The Reserve Bank of India launched its concessional swap facility on June 8 to attract fresh FCNR(B) deposits, external commercial borrowings, and overseas foreign currency bonds.




The scheme triggered massive foreign capital inflows, reaching USD 136.4 billion by August 31.

Commercial banks mopped up USD 127.2 billion in FCNR(B) deposits alone-far outpacing market expectations of USD 90-100 billion.

Due to the overwhelming response, the RBI advanced the scheme's closing date to August 31, ending the window a month earlier than its original September 30 deadline.



Separately, in an exclusive interaction with ANI, Setty also pointed to rapid structural shifts in capital market infrastructure, highlighting the transition toward asset tokenisation.



"This is a wider movement towards tokenisation. If you remember we had done tokenisation of certificate of deposits and now this is a next instrument …market instruments are getting tokenised, it's a good beginning," Setty said.

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