FCNR(B) Deposit Drive Poses Profitability Pressure for Banks

Summary

Banks' reliance on FCNR(B) deposits could strain profit margins due to lower overseas interest rates and thin lending spreads, particularly impacting banks with lower funding costs like ICICI Bank and HDFC Bank. Over $32 billion has been mobilized through the FCNR(B) scheme by mid-July, making profitable deployment crucial for banks.