ICICI Bank, HSBC Lead India's FCNR-B Deposit Rally

India's foreign currency non-resident (FCNR-B) deposit base has swollen to $136.4 billion (Rs 12.96 lakh crore), with significant variations in how different lenders have captured this capital inflow. ICICI Bank and RBL Bank have emerged as disproportionate winners, securing larger slices of the FCNR-B pool relative to their overall deposit portfolios compared to larger peers.

Foreign banks including HSBC and Standard Chartered have also gained meaningful traction in the segment, capitalising on their international networks and cross-border capabilities. These lenders have proven effective at attracting non-resident Indian (NRI) and overseas depositors seeking rupee exposure with foreign currency flexibility.

Notably, HDFC Bank—India's largest private sector lender by deposit base—has underperformed relative to expectations in the FCNR-B mobilisation drive. This suggests a strategic divergence among top-tier banks in pursuing foreign currency deposits, or a shift in NRI preference toward competing institutions.

The FCNR-B surge reflects heightened overseas appetite for Indian banking assets amid rupee volatility and interest rate expectations. Banks capturing larger shares of these deposits gain access to cheaper, relatively stable foreign currency funding at a time when traditional international borrowing remains costly. The varying capture rates indicate differing competitive positions and strategic priorities among India's banking majors in the offshore rupee market.