An SBI research report on Friday said banks are likely to net $5 billion by March, 2014 by availing RBI’s special window facility to swap foreign currency non-resident (FCNR) dollar funds -- half of what experts from foreign brokerages have initially estimated.
Analysts from global financial majors like Morgan Stanley and Bank of America-Merill lynch had projected that lenders would be able to garner up to $10 billion through this route. “This scheme may attract up to $5 billion if extended till March,” Chief Economic Adviser at State Bank’s economic research department Soumya Kanti Ghosh said in the report. Describing the mover as “positive”, Ghosh said the cost of the such money will 9.8 per cent if the banks take this route.
“After adjusting for this and also netting out the carrying cost of CRR and SlR, the cost is exactly 9.8 per cent,” he said. The note says “historically, the highest monthly FCNR-B deposits gathering stands at $700 million, which roughly means our banks will be able to mobilise $2 billion by November and $5 billion by March.”