Bumper FCNR(B) Inflows May Dilute Banks' Margins but Boost Earnings by up to Rs 11,000 Crore: Jefferies

80% of FCNR (B) inflows came via the leverage route

80% of FCNR(B) inflows came via leverage, with two-thirds in five-year deposits, driven by high interest rates.

Bumper FCNR(B) inflows may dilute banks' margins but boost earnings by up to Rs 11,000 crore: Jefferies

The FCNR(B) schemes $127 billion inflows should boost banking sector earnings by Rs 10,000–11,000 crore annually, despite potential near-term margin pressure. Analysts highlight significant benefits for small private banks and NBFCs, while providing the RBI with increased foreign exchange reserves.

FCNR(B) Deposits May Pressure Banks’ Margin as Overseas Spreads Remain Limited: Motilal Oswal

Get latest articles and stories on Business at LatestLY. Banks may face near-term pressure on their net interest margins (NIMs) due to limited spreads on the overseas leveraged portion of FCNR(B) deposits, although the deployment of these deposits and an improving asset mix are expected to support faster balance sheet growth and earnings, Motilal Oswal Financial Services said in a report. Business News | FCNR(B) Deposits May Pressure Banks’ Marg…