Indian Bank eyes $2 billion in FCNR deposits after securing $140 million in 25 days

Public sector lender Indian Bank is aiming to raise $2 billion through foreign currency non-resident (bank), or FCNR(B), deposits. The move follows the Reserve Bank of India’s decision to withdraw the interest rate ceiling on fresh FCNR(B) deposits with maturities of three to five years, a relaxation that runs until September 30, 2026.

The bank has seen a spurt in FCNR(B) deposits over the past 25 days following the RBI’s move. ‘So far, we have secured $140 million between June 15 and July 9. We plan to raise around $2 billion by September this year. We already have a pipeline of $1 billion,’ Indian Bank MD and CEO Binod Kumar said in Chennai on Friday.

The inflow target is more than four times the bank’s FCNR(B) deposit mobilisation in FY26, when it raised $457 million in total. Kumar said the proposed $2 billion mobilisation would be among the highest the bank has achieved under the scheme.

To attract the inflows, Indian Bank has revised the interest rate on FCNR(B) deposits to 6% from 5.5%, with the annualised return for depositors working out to around 13%-14%.

The deposit push comes as Indian Bank posted a 10% rise in net profit to Rs 3,273 crore in the first quarter, up from Rs 2,973 crore in the year-ago period, driven by an increase in yield on advances and strong growth in net interest income, among other factors.