Archive · 2 Oct 2026
Why $143.5 Billion FCNR Inflows May Not Ensure Bank Liquidity
Banks received a large amount of money through FCNR(B) deposits.
However, they cannot lend all of that money to customers.
Rules require banks to keep some money with the Reserve Bank of India or in safe liquid assets.
Digital payment systems and changes in deposit patterns also reduce how much lending the deposits can support.
SBI Research estimates that banks will need about ₹48.2 lakh crore in new deposits to support projected credit growth.
It expects only about ₹40 lakh crore in incremental deposits under its assumptions.
This creates an estimated shortfall of ₹8.2 lakh crore.
SBI Research expects surplus liquidity to fall substantially by March 2027.
The report says FCNR(B) inflows helped fund recent credit growth but should not be treated as unlimited lending capacity.
SBI Research says $143.5 billion in FCNR(B) inflows may not create equivalent lending capacity for banks.
CRR, SLR and LCR rules require banks to hold part of additional deposits with the RBI or in liquid assets.
The research estimates a ₹8.2 lakh crore deposit gap after accounting for projected credit growth and regulatory requirements.
SBI Research projects core surplus liquidity will decline from ₹13.9 lakh crore on September 15 to ₹3.5 lakh crore by March 2027.
Credit growth reached 18.1% year-on-year while deposit growth was 17.3% in the fortnight ended September 15.
- Who
- SBI Research and India’s banking system.
- What
- The report assesses why $143.5 billion of FCNR(B) inflows may not translate into equivalent bank lending capacity.
- When
- The analysis refers to the fortnight ended September 15 and projections through December-end and March 2027.
- Where
- India’s banking and financial system.
- Why
- CRR, SLR and LCR requirements, along with UPI and SNA-Sparsh effects, limit how much of the additional deposits banks can use for lending.
- FCNR(B) inflows
- $143.5 billion
- Projected credit growth
- 16% in FY27, equivalent to about ₹34 lakh crore of incremental credit
- Assumed deposit growth
- 15.5%, equivalent to around ₹40 lakh crore of incremental deposits
- Required incremental deposits
- Approximately ₹48.2 lakh crore after regulatory and operating-multiplier effects
- Estimated deposit gap
- ₹8.2 lakh crore
- Core surplus liquidity
- Projected to decline from ₹13.9 lakh crore on September 15 to about ₹7 lakh crore by December-end and ₹3.5 lakh crore by March 2027
- Recent growth comparison
- Credit grew 18.1% year-on-year and deposits grew 17.3% in the fortnight ended September 15