FCNR(B) Inflows May Cut Indian Banks’ Funding Costs By Upto 50 Bps As Liquidity Improves

Strong FCNR(B) inflows are expected to lower Indian banks’ funding costs by up to 50 basis points by boosting liquidity and reducing reliance on costly certificates of deposit. Banks may use the surplus funds for fresh loans, refinancing or RBI deposits, while FCNR(B) deposits could generate an estimated Rs 10,000-11,000 crore annual profit pool.