Tamilnad Mercantile Bank doubles FCNR(B) haul to $20M, targets $50M by September
What's the deal? Tamilnad Mercantile BankDealroom has a profile for this one. Try Dealroom → has raised $20 million through foreign currency non-resident (bank) deposits under a special swap facility offered by the Reserve Bank of IndiaDealroom has a profile for this one. Try Dealroom →, a senior bank official said Tuesday. That doubles the $10 million the private-sector lender had raised by the end of last month. It aims to reach $50 million by the end of September.
Why now? The Reserve Bank of India in June announced a swap facility to cover the full hedging costs for banks raising fresh three- to five-year FCNR(B) deposits until September 30. The facility took effect on June 8 and stays open until October 16 for deposits raised in that window.
What's the endgame? The bank plans to partner with foreign banks that lack an Indian presence to tap their customers. "We have initiated talks with some foreign and large banks to tap their customers. It is still in the initial stage and will take some time to materialise," the official said. It is also weighing overseas operations in Malaysia, Singapore, and Dubai.
By the numbers: The bank's net profit rose 35% on year to INR 4.12 billion in the June quarter. Its shares closed at INR 867 on the National Stock ExchangeDealroom has a profile for this one. Try Dealroom → on Tuesday, down 2.6%.
The signal: The RBI's push to attract foreign currency inflows is working at scale — its FCNR(B) measures drew $36.73 billion between June 8 and July 31. Tamilnad Mercantile Bank's modest but growing contribution shows how smaller private lenders are using the hedging subsidy to court non-resident depositors and expand abroad.
Read more: Informist Media
Image credit: Generated with Gemini
