Foreign banks to provide upfront loans to NRIs for dollar deposits

 

 

 

SINGAPORE: Foreign banks will provide upfront financing for wealthy non-resident Indian clients to entice them to place bulky dollar deposits back home in response to India's drive for dollar funding to defend its weak currency, sources said.

This would resurrect a practice which proved successful in drawing in dollars from non-resident Indians ( NRIs) in 2000, when the rupee was also under pressure, and the sources said banks could raise about $10 billion or more.

Foreign banks will finance the bulk of these dollar deposits. This is likely to be welcome news for Indian authorities because it could avoid the need for a sovereign bond or special government-backed deposit schemes to attract dollar inflows to support the rupee