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GIFT City Channels Nearly $53 Billion Through FCNR(B) Scheme
GIFT City is becoming a place where international banking can happen inside India.
Banks there helped bring nearly $53 billion into India through a special foreign-currency deposit program.
This was about 42% of all the money raised through that program.
The Reserve Bank of India created the program on June 5.
It encouraged banks to collect deposits from Indians living abroad for three to five years.
The program was intended to support India’s foreign-exchange position while the rupee and balance of payments faced pressure.
Banks in GIFT City approved $54.02 billion in loans and actually paid out $52.82 billion by August 31.
They also handled other overseas borrowing and helped Indian banks raise money through bonds.
GIFT City’s International Banking Units facilitated about $52.82 billion of FCNR(B) swap-scheme disbursements by August 31.
The amount represented roughly 42% of the $127.2 billion mobilised through the Reserve Bank of India’s special forex swap facility.
International Banking Units sanctioned $54.02 billion in loans under the scheme, with $52.82 billion actually disbursed.
The Reserve Bank of India introduced the facility on June 5 to encourage three- to five-year FCNR(B) deposits.
International Banking Units also disbursed $11.62 billion in external commercial borrowings, while Indian banks raised $11.12 billion through IFSC bond issuances from April to August.
- Who
- International Banking Units at GIFT City, Indian banks, and the Reserve Bank of India.
- What
- GIFT City facilitated nearly $53 billion of FCNR(B) mobilisation under the Reserve Bank of India’s special forex swap facility.
- Where
- GIFT City’s International Financial Services Centre in India.
- When
- The facility was introduced on June 5; figures cited cover activity through August 31, with other figures covering April to August.
- Why
- The facility was intended to encourage foreign-currency deposits and strengthen India’s foreign-exchange position amid pressure on the rupee and balance of payments linked to the West Asia conflict.
Key facts
- FCNR(B) mobilisation
- About $52.82 billion was actually disbursed through GIFT City International Banking Units.
- Share of total
- The GIFT City amount represented about 42% of the $127.2 billion mobilised under the facility.
- Loans sanctioned
- International Banking Units sanctioned $54.02 billion under the FCNR(B) swap scheme.
- Facility launch
- The Reserve Bank of India introduced the facility on June 5.
- Deposit maturity
- The scheme encouraged fresh FCNR(B) deposits with maturities of three to five years.
- External commercial borrowings
- International Banking Units disbursed $11.62 billion during April-August.
- Bond issuances
- Indian banks raised $11.12 billion through bond issuances on IFSC exchanges during April-August.
Sources
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