Bank Stocks Rally After RBI Reports USD 136.38 Bn Inflows Through Special Forex Swap Window

New Delhi: Banking stocks rallied on Thursday after the Reserve Bank of India said total inflows reached USD 136.377 billion through its special forex swap window to bolster foreign-exchange liquidity.

The fresh numbers from the central bank triggered buying across the banking space, with major lenders leading the gains.

Axis Bank emerged as the top gainer among the 30 Sensex constituents, climbing 1.37 per cent to Rs 1,272.15 apiece on the BSE. HDFC Bank rose 1.16 per cent to Rs 709.10, ICICI Bank advanced 1.08 per cent to Rs 1,443.45 and State Bank of India gained 1.07 per cent to Rs 1,031.65.

Kotak Mahindra Bank was the only laggard among the Sensex constituents, slipping 0.22 per cent to Rs 423.70.

RBL Bank was among the strongest performers, jumping 5.10 per cent to Rs 409.35.

The rally was broad-based across the banking space. The BSE PSU Bank surged 1.45 per cent, while the BSE Private Banks Index gained 0.87 per cent. Bankex and BSE Top 10 Banks advanced 0.76 per cent and 0.75 per cent, respectively.

The broader market was also in positive territory, with the 30-share BSE Sensex gaining 144.11 points to 76,714.46 and the NSE Nifty rising 20.10 points to 23,934.55.

The RBI on Wednesday said India mobilised a record USD 127.23 billion through Foreign Currency Non-Resident (Bank), or FCNR(B), deposits, as of August 31.

Including overseas foreign-currency borrowings (OFCB) and external commercial borrowings (ECB), total inflows under the measures reached USD 136.377 billion.

The strong response prompted the RBI to close the special FCNR(B) window a month ahead of schedule. The facility, launched on June 8, was initially scheduled to remain open until September 30 but was closed on August 31 after the central bank said its objective had been achieved ahead of schedule.

FCNR(B) deposits are fixed-term deposits held in foreign currencies, with the principal and interest repaid in the same currency, shielding depositors from direct rupee exchange-rate risk.

The arrangement allows non-resident Indians to place foreign-currency funds with Indian banks without taking direct rupee-currency risk.

The inflows provide the RBI with a larger pool of foreign currency to manage external pressures and support liquidity in the foreign-exchange market, particularly if rupee volatility intensifies.

They also highlight India’s ability to tap its roughly 35-million-strong overseas diaspora for hard currency when global financial conditions become more challenging.

While the RBI did not provide bank-wise mobilisation figures, ICICI Bank separately said it had mobilised gross USD 17.88 billion through FCNR(B) deposits up to August 31.

Private sector lender RBL Bank on Wednesday said it had garnered USD 3.4 billion through FCNR(B) deposits up to August 31.

(Disclaimer: Except for the headline, this article has not been edited by HDFC Sky editorial team and is auto-generated from PTI feed.)