HDFC Bank FCNR-B deposits gain momentum as the lender raises $750 million overseas and plans more funding to support NRI customers.

HDFC Bank FCNR-B deposits gain raises $750 million overseas

The bank is stepping up its focus on non-resident Indian (NRI) customers after raising around $750 million through overseas borrowing.

The lender is now planning to raise more funds in the coming weeks. The additional funding will support its strategy around Foreign Currency Non-Resident Bank (FCNR-B) deposits.

The bank expects activity in the NRI deposit segment to increase over the next two months.

HDFC Bank FCNR-B deposits strategy expands

HDFC Bank Managing Director and Chief Executive Officer Sashidhar Jagdishan said the bank had already raised approximately $750 million through offshore fundraising.

The lender is also considering additional overseas borrowing.

The new funds could help the bank provide financing support to eligible customers linked to the FCNR-B deposit programme.

The bank is currently following a three-part strategy.

This includes attractive deposit rates, funding through its own overseas borrowings and financing arrangements with international partner banks.

NRI deposit activity may rise

The bank expects FCNR-B deposit mobilisation to gain pace before the September-end deadline.

The programme is attracting interest from both large and small-ticket NRI customers.

According to the bank, several customers are showing interest even without using the leverage facility.

This indicates that the offering may appeal to customers simply looking for competitive foreign currency deposit options.

HDFC Bank plans around 9x leverage

HDFC Bank is currently considering leverage of around nine times for eligible customers through its own balance sheet.

The final financing amount will depend on factors such as customer eligibility, regulatory requirements and the structure of the transaction.

The bank is also working with overseas partner banks.

Through these arrangements, the available leverage could range between nine times and 19 times, depending on local regulations.

However, the bank appears to be taking a cautious approach.

Management indicated that the initial leverage level could be reassessed later if customer demand and market conditions support a change.

What it means for NRI customers

The strategy could give NRI customers more options for managing their foreign currency savings.

FCNR-B deposits allow eligible NRIs to maintain deposits in permitted foreign currencies, subject to applicable rules and conditions.

This can help customers reduce their direct exposure to changes in the value of the Indian rupee.

However, the actual benefit will depend on factors such as interest rates, currency movements, borrowing costs and individual eligibility.

Customers should also carefully review the terms of any leverage-linked facility before making a decision.

Higher leverage can increase the size of a financial transaction, but it can also increase the associated risks.

Deposits already gaining traction

HDFC Bank has not announced a specific public target for FCNR-B deposit mobilisation.

However, the bank said it had already mobilised a substantial amount of such deposits in recent days.

The interest is reportedly coming from both large and small NRI customers.

The bank expects this momentum to continue as the September deadline approaches.

HDFC Bank reports higher profit

The development comes after HDFC Bank reported a 5% year-on-year rise in net profit for the June quarter.

The bank reported a net profit of ₹19,060 crore.

Its net interest margin stood at 3.26% during the quarter.

Net interest margin is an important banking metric. It measures the difference between the interest a bank earns from loans and the interest it pays on deposits.

The latest results provide the backdrop for HDFC Bank’s focus on overseas funding and NRI deposits.

Focus remains on foreign currency funding

HDFC Bank’s latest strategy highlights the growing importance of foreign currency funding.

The lender is combining overseas borrowing with deposit mobilisation and international banking partnerships.

This could help it serve a wider range of NRI customers.

The next two months will be important for the bank.

The lender will be looking to attract more FCNR-B deposits before the September-end deadline.

At the same time, customers will likely be watching deposit rates, eligibility rules and the terms attached to financing facilities.

Conclusion

HDFC Bank’s $750 million overseas fundraising marks an important step in its strategy to expand foreign currency funding.

The bank is now looking to build further momentum in the FCNR-B deposit segment.

With competitive deposit rates, potential leverage and international banking partnerships, the lender is targeting both large and small NRI customers.

However, customers should compare the available terms and understand the risks before choosing any deposit or leverage-linked financial product.

The coming weeks could show how strongly demand for HDFC Bank’s FCNR-B offering develops before the September deadline.

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Editorial Note

The information in this article is based on publicly available statements and financial information. Figures, forecasts and market-related details may change as new information becomes available.

Disclaimer

This article is intended for informational and educational purposes only. It does not constitute financial, investment or banking advice. Readers should independently verify the latest terms, regulations and product details before making any financial decision.