Key Highlights
- PNB aims to attract $2.5-3 billion through FCNR(B) deposits.
- The target follows RBI measures designed to encourage foreign currency inflows.
- PNB CEO Ashok Chandra described the RBI’s move as highly positive for the banking sector.
- The bank expects lower deposit costs and improved net interest margins (NIMs).
- FCNR inflows are likely to support growth in net interest income (NII).
- The banking industry could collectively mobilize $35-40 billion through FCNR deposits.
- PNB expects MSME loan growth to remain above 20% in the coming period.
PNB Sees Strong FCNR Deposit Inflows Following RBI’s Foreign Currency Mobilisation Measures
New Delhi, June 8, 2026: State-owned lender Punjab National Bank (PNB) expects to mobilize between $2.5 billion and $3 billion through Foreign Currency Non-Resident (Bank) deposits after the Reserve Bank of India’s recent initiatives aimed at boosting foreign currency inflows into the country.
The announcement comes shortly after the Reserve Bank of India unveiled a series of measures designed to attract overseas deposits and strengthen India’s external financial position amid evolving global economic conditions.
Speaking about the impact of the RBI’s policy actions, PNB Managing Director and Chief Executive Officer Ashok Chandra described the measures as highly beneficial for both banks and the broader financial system.
According to Chandra, the banking industry as a whole could potentially mobilize between $35 billion and $40 billion through FCNR(B) deposits if the response from non-resident Indians (NRIs) remains strong.
RBI Measures Expected to Lower Funding Costs
FCNR(B) deposits are foreign currency-denominated term deposits maintained by non-resident Indians with Indian banks. These deposits allow banks to access overseas funds while offering NRIs an avenue to maintain savings in foreign currencies.
PNB expects the additional foreign currency inflows to help reduce overall funding costs. Lower-cost deposits generally improve a bank’s profitability by enabling it to deploy funds into higher-yielding assets and loans.
Bank executives believe the expected inflows could contribute positively to the institution’s Net Interest Income (NII) and Net Interest Margins (NIMs), two key indicators closely watched by investors and analysts to assess banking performance.
Improved margins would provide support to earnings growth at a time when competition for domestic deposits remains intense across the banking sector.
Positive Outlook for Credit Growth
Apart from the expected benefits from FCNR deposits, PNB remains optimistic about loan growth across key business segments.
The bank anticipates continued momentum in lending to the Micro, Small and Medium Enterprises (MSME) sector, with advances expected to grow by more than 20%. The MSME segment has emerged as a major focus area for public and private sector lenders as economic activity strengthens and government-backed initiatives continue to support entrepreneurship and business expansion.
Industry experts note that strong credit growth combined with improved funding costs could create favorable conditions for profitability across the banking sector over the coming quarters.
RBI’s Broader Strategy to Strengthen External Finances
The central bank’s recent policy measures are part of a broader effort to attract foreign capital and reinforce India’s external sector position. By encouraging FCNR(B) deposits and other foreign currency inflows, policymakers aim to enhance liquidity, strengthen foreign exchange reserves, and improve resilience against global market volatility.
Such initiatives have historically been used during periods of uncertainty in international financial markets to attract overseas funds and support domestic banking liquidity.
With global interest rates, currency movements, and geopolitical developments continuing to influence capital flows, Indian banks are expected to actively leverage the RBI’s measures to attract deposits from the global Indian diaspora.
Banking Sector Poised to Benefit
Analysts believe banks with extensive NRI customer networks and strong overseas relationships are likely to benefit the most from the latest RBI framework. Public sector banks such as PNB are expected to be among the major beneficiaries due to their broad customer base and established presence across international banking corridors.
If inflows materialize as projected, the banking sector could witness improved liquidity conditions, stronger balance sheets, and enhanced lending capacity.
For PNB, the anticipated $2.5-3 billion FCNR inflow could not only strengthen its funding profile but also provide additional support for credit expansion, profitability improvement, and sustained business growth in the coming financial year.
