- HDFC Bank raised nearly $12 billion via FCNR(B) deposits under RBI’s swap facility
- Deposits were mobilised at an interest rate of 6.25% to boost foreign-currency inflows
- The move aims to improve HDFC Bank’s foreign funding and reduce its credit-to-deposit ratio
HDFC Bank has pulled nearly $12 billion through Foreign Currency Non-Resident (Bank) [FCNR-B] deposits under the Reserve Bank of India's concessional swap facility.
The country's largest private sector lender has mobilised around $11.5 billion-$12 billion through FCNR(B) deposits under the facility. According to sources who spoke to NDTV Profit, the deposits were raised at an interest rate of 6.25%.
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This move is part of RBI's push to bring more foreign money into the country. RBI introduced the concessional swap window to encourage banks to mobilise FCNR(B) deposits and boost foreign-currency inflows into India. Under the arrangement, banks can raise FCNR(B) deposits and swap the foreign currency with the central bank at a concessional rate.
Sources told NDTV Profit that the move is expected to provide HDFC Bank with additional foreign-currency funding while also helping the lender bring down its elevated credit-to-deposit (CD) ratio. The bank's CD ratio had risen sharply following its merger with erstwhile parent HDFC Ltd and has been a key area of focus for the lender.
The RBI's concessional swap facility has seen strong participation from banks. RBI data shows lenders collectively mobilised around $127 billion through FCNR(B) deposits under the window.
The central bank has been using the facility to strengthen foreign-currency liquidity and support the rupee amid external-sector pressures. The swap cost on these deposits, expected to be around 3% annually, is borne by the RBI. HDFC Bank's comments on the deposit mobilisation were awaited at the time of publication.
HDFC earlier in a statement said that it had raised $1.75 billion through senior unsecured bonds, marking its biggest overseas fundraising since the 2008 global financial crisis. The fundraising came as Indian lenders stepped up their presence in the overseas bond market.
The issue, raised through the bank's GIFT City branch, was split into two tranches. The first tranche comprised $500 million of three-year bonds, while the second included $1.25 billion of five-year bonds.
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