Yes Bank taps $2 billion FCNR(B) deposits via RBI swap scheme

Yes Bank has successfully raised $2 billion through Foreign Currency Non-Resident (FCNR) deposits utilising the RBI's swap window mechanism, according to market sources. The mobilisation marks a significant step in the lender's efforts to optimise its deposit portfolio and strengthen its balance sheet amid evolving liquidity conditions.

The funds were predominantly raised across three- and five-year maturity buckets, reflecting the bank's preference for medium-term funding stability. By tapping the RBI's swap window—which allows banks to convert foreign currency deposits into rupee liabilities at predetermined rates—Yes Bank can effectively manage its forex exposure while securing funds at competitive rates.

The capital injection is expected to serve dual purposes for the private sector lender. The bank intends to use a portion of the funds to retire higher-cost domestic deposits, thereby improving its net interest margins. Simultaneously, the remaining capital will support incremental credit expansion, enabling the bank to capitalise on growing loan demand across its customer segments.

The move reflects broader industry trends as banks seek diverse funding sources to manage deposit growth pressures and maintain optimal asset-liability ratios. The RBI's swap window facility, designed to enhance forex management flexibility for banks, has become an increasingly attractive avenue for lenders seeking cost-effective foreign currency funding alternatives during periods of tight domestic liquidity.