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$133 billion FCNR(B): Where has the money actually gone?

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$133 billion FCNR(B): Where has the money actually gone?

The RBI's special dollar rupee swap facility attracted $143.596 billion in foreign currency inflows by September 18, including $132.98 billion through FCNR(B) deposits, $5.32 billion through overseas foreign currency borrowings and $5.296 billion through external commercial borrowings.

GIFT IFSC banks had sanctioned $54.02 billion and disbursed $52.82 billion under the FCNR(B) swap facility by August 31. Loans against fixed deposits rose 43.2 per cent year on year to Rs2.04 lakh crore in August, although the FCNR(B) component is not separately disclosed. S&P estimates banks could expand their balance sheets by $190 billion-$220 billion if 50-75 per cent of the $127 billion raised through August 31 is leveraged. A large part of the remaining liquidity was initially deployed in government securities and money market instruments, while the RBI subsequently absorbed surplus liquidity.

98 billion mobilised through FCNR(B) deposits has taken several routes through India's financial system, with a large part of the foreign currency absorbed by the Reserve Bank of India through its swap facility while banks received rupee liquidity. 82 billion was subsequently disbursed through International Banking Units at GIFT IFSC , while banks have also used the deposits as a source of funding and collateral for further lending. 296 billion through external commercial borrowings. The FCNR(B) window was closed on August 31, a month ahead of the original deadline, after the RBI said the response had been encouraging.



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