RBL BANK SHARES RISE AS LENDER MOPS UP FROM FCNR DEPOSITS

RBL Bank shares gained more than 4% on September 3, a day after the private sector lender announced that it had mobilised $3.4 billion through Foreign Currency Non-Resident Bank deposits as of August 31, the closing date for the Reserve Bank of India’s concessional swap facility. Loans extended by the bank’s International Banking Unit against these deposits stood at $1.08 billion. Analyst described the $3.4 billion mobilisation under the RBI’s swap facility as an “outsized haul” for a mid-sized bank, saying the development could significantly reshape RBL Bank’s earnings outlook. The deposit mobilisation was aided by the bank’s promoter, Emirates NBD, along with its subsidiaries and affiliates, leveraging the strong financial corridor between the UAE and India. RBL Bank has used its relationship with Emirates NBD to tap a disproportionately large pool of FCNR-B deposits from the UAE. The $3.4 billion mobilisation, equivalent to around ₹32,472 crore, represents approximately 26% of the bank’s total deposits and 37% of its term deposits. It also gives RBL Bank a 2.7% share of the FCNR-B deposit mobilisation market, significantly higher than its systemic deposit share of over 0.5%. The development could have meaningful implications for the bank’s earnings, given the scale of the deposits mobilised. Under the FCNR-B scheme, banks offer competitive interest rates to attract foreign currency deposits. These deposits are maintained in foreign currencies, with both the principal and interest repayable in the same currency. The RBI introduced its special USD-INR forex swap facility on June 8 for FCNR-B deposits, Overseas Foreign Currency Borrowings (OFCBs) and External Commercial Borrowings (ECBs). The initiative was aimed at attracting foreign capital and supporting the rupee amid pressure against the US dollar.