Mumbai, July 14 (IANS) The Reserve Bank of India (RBI) on Tuesday said that Indian firms’ proposals to raise money under the external commercial borrowings (ECB) route saw a surge of 25.8 per cent (month-on-month) in May at over $4.73 billion.

The central bank released the data on External Commercial Borrowings (ECB), Foreign Currency Convertible Bonds (FCCB), and Rupee Denominated Bonds (RDB), both through the automatic and the approval routes, for the month of May, and it shows that the ECB filings stood at more than $4.73 billion in May, compared to $3.77 billion in April.

The Indian Railway Finance Corporation Limited led the intent for over $1.11 billion, while NTPC filed for $750 million.

On Monday, the chiefs of public sector banks (PSBs) and financial institutions informed Finance Minister Nirmala Sitharaman that there was a strong response from NRIs to the higher interest rates and incentives that have been announced across foreign currency non-resident bank deposits (FCNR (B) deposits), ECBs, and Overseas Foreign Currency Borrowings (OFCBs) swap initiatives.

The banks expect funds flowing in from NRIs to pick up further momentum as they have stepped up their outreach to the Indian diaspora. The Finance Minister called upon banks to further intensify their outreach to the NRI diaspora, introduce innovative deposit products, and sustain the momentum of mobilisation during the remaining period of the schemes.

The Managing Directors further informed that banks are offering attractive returns on FCNR (B) deposits, including five-year deposits, supported by the suspension of the interest rate ceiling on fresh FCNR(B) deposits under the scheme.

The public sector banks also informed that they have put in place customised outreach strategies, including digital channels, to engage with the non-resident Indian diaspora and enhance deposit mobilisation. They further noted that FCNR(B) deposit mobilisation has shown a clear accelerating trend, supported by attractive returns being offered by banks.

The schemes, announced by the RBI Governor in the Monetary Policy Statement of June 5, comprise a US Dollar-Rupee forex swap facility at par for fresh FCNR(B) deposits and a concessional swap facility for eligible ECBs and OFCBs, aimed at attracting foreign capital, strengthening the balance of payments and incentivising capital inflows.

–IANS

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