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Sitharaman directs public banks to chase NRI deposits at 7.5% to shore up forex

The finance minister has launched a coordinated capital mobilization campaign targeting the global Indian diaspora, leveraging RBI's removal of interest rate caps on FCNR(B) deposits.

7.5%Max yield on FCNR(B) US dollar deposits

FINSAMUDRA DESK · 14 Jul 2026, 1:00 pm IST · 1 MIN

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Nirmala Sitharaman has officially directed public sector banks to aggressively step up their Non-Resident Indian (NRI) outreach to accelerate foreign currency inflows. — Image: Finsamudra LinkedIn archive

Finance Minister Nirmala Sitharaman has formally directed public sector banks to aggressively expand their Non-Resident Indian (NRI) outreach programmes. This is not a passive policy suggestion but an explicit mandate for execution across state-backed lenders.

The regulatory foundation was laid when the Reserve Bank of India suspended interest rate ceilings on fresh FCNR(B) deposits. Indian banks can now offer yields of up to 7.5% on US dollar deposits—a rate that makes traditional Western bank deposits significantly uncompetitive.

Bank CEOs are being tasked to transform their institutions from domestic deposit-takers into active global wealth managers. The mandate includes direct outreach to NRI concentrations in Singapore, the Middle East, the UK, and the US.

This marks a shift in India's foreign exchange management strategy. Rather than relying solely on the RBI's currency desk, the government is deploying bank sales teams as frontline operators in the battle to mobilize foreign currency inflows from the diaspora.

Sources

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Sitharaman directs public banks to chase NRI deposits at 7.5% to shore up forex

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