RBI Lets Banks Lend Against Forex Deposits to Boost Dollar Inflows
Updated
Updated · Bloomberg · Jun 23
RBI Lets Banks Lend Against Forex Deposits to Boost Dollar Inflows
3 articles · Updated · Bloomberg · Jun 23
Summary
Tuesday’s RBI clarification lets banks make loans against foreign-currency deposits raised under India’s special overseas-funds program, widening how lenders can use those deposits.
Banks may lend to overseas residents who place the deposits and mark a lien on them, a structure the central bank said can support greater participation in the scheme.
The RBI also said lenders can issue letters of credit against such deposits, adding another permitted use aimed at making the program more attractive.
The move is designed to pull more overseas money into India and strengthen dollar inflows at a time when the central bank is seeking to draw foreign-currency funds.