The Reserve Bank of India has closed its special FCNR(B) mobilisation window, shifting the focus to banks’ ability to attract funds from domestic depositors.
The FCNR(B) scheme had delivered a sharp but exceptional boost to deposit growth and to system liquidity, providing temporary liquidity support to the banking system.
With the window now closed, the ongoing strength of domestic deposit growth will depend on banks’ ability to attract deposits from local sources.
The development matters for taxpayers, businesses, investors and regulators because it affects funding stability and liquidity in the banking system, with potential implications for lending conditions and overall financial stability.
