look news india
A very big, historic and positive news is coming out from the Indian banking sector and the country’s macro-economy. According to a recent report by the prestigious news agency Reuters, the country’s major state-run banks strongly believe that a huge foreign fund of about $ 30 billion (about Rs 2.9 lakh crore in Indian currency) can come into the Indian banking system through a special overseas deposit scheme of the Reserve Bank. After this big news coming from economic and banking sources, the turmoil in the financial and stock markets of the country has intensified. Experts believe that this huge inflow of foreign currency is going to prove to be a big game-changer in eliminating the current liquidity crisis in Indian banks.
Government banks submitted their big estimates to Finance Minister Nirmala Sitharaman
Five senior bankers with direct and in-depth knowledge of this entire matter told Reuters that India’s major public sector banks have submitted a detailed blueprint in this regard to senior central government officials. Banks hope that they will easily raise about $ 30 billion i.e. Rs 2.9 lakh crore by taking maximum advantage of the Central Bank’s subsidized dollar deposit window.
Two highly placed sources clarified that the heads (MDs & CEOs) of public sector banks had presented this positive estimate in a high-level meeting held with the country’s Finance Minister Nirmala Sitharaman and other top officials of the Finance Ministry earlier this week. A banker present in the meeting said that all the public sector banks have given an exact outline of the amount of dollars that can be raised at their respective levels during the stipulated period of this scheme. Under this, the country’s big public sector banks have estimated an inflow of about 4 to 5 billion dollars, while small and medium scale banks are aiming to raise foreign funds of 1 to 2 billion dollars.
RBI started swap facility on June 5, scheme will close on September 30
It is worth noting that the Reserve Bank of India (RBI) had last year aimed at increasing the foreign exchange reserves and cash in the country’s economy. 5th June A special step was taken. Under this, RBI had announced a very attractive ‘Zero-Cost Foreign-Exchange Swap Facility’ for deposits raised from Non-Resident Indians (NRIs). With the availability of this concessional facility, banks have got the freedom to give higher than normal returns (interest) on such NRI deposits, which is attracting foreign investors towards India. This ambitious scheme of RBI is upcoming 30 September is going to be closed.
Earlier, Reuters had told in one of its reports that India had successfully achieved inflow of about 10 billion dollars in the initial weeks itself through this special deposit program of the Central Bank. However, the funds raised so far are a small fraction of the total expected inflows, which major global financial analysts have estimated at between $40 billion and $70 billion. Banks believe that this pace will increase manifold in the last months.
Most money will come from Gulf countries and Singapore, increase due to lien facility
Talking about the main sources of foreign funds and its current status, Indian Bank’s Managing Director (MD) and CEO (CEO) Binod Kumar has shared very important information in the Reuters report. He said, “Even though the launch of this scheme may have been a little slower than expected, we are confident that by the deadline of September, we will raise $ 2 billion under this scheme through our bank alone. The highest flow of investment in this scheme is expected to come from Gulf countries and Singapore.” Indian Bank has so far raised funds of about $ 150 million through this scheme.
According to banking experts, A clarification issued by the Central Bank (RBI) on June 23 After this there has been a flood of investment in this scheme. RBI had made it clear that banks will have full permission to give loans to investors against these foreign deposits and impose lien (legal rights) on them. This decision has made it much easier for investors to use leverage and the entire program has become more attractive than ever. Three out of five senior bankers quoted the officials as saying that they fully expect the biggest and main flow of the scheme to be seen in the last weeks, just like what was seen during the 2013 crisis when expatriates made record investments in the last days.