The bank’s extensive overseas network across Hong Kong, Singapore, the UAE, the UK, Asean and other markets, coupled with its recently opened NRI-focused branches in India, has helped in attracting dollar deposits, sources said. Foreign banks having cost advantage are aggressive in offering leverage while most Indian lenders are still in the process of tapping the overseas market for funds amid hardening rates, sources said. 


The RBI’s special swap facility, which came into effect on June 8, was introduced to bolster the country’s balance of payments (BoP) by attracting foreign capital inflows. Data showed that banks had mobilised $20.72 billion as of July 17, including $17.41 billion through FCNR (B) deposits, $1.97 billion via overseas foreign currency bonds (OFCBs), and $1.34 billion through external commercial borrowings (ECBs). 


Bulk of the inflows ($17.4 billion) has come through FCNR (B) deposits, foreign banks leading the mobilisation, while participation from large private-sector lenders has remained limited so far, analysts and bankers said. Macquarie Research in a report earlier this week said their channel checks suggest foreign banks have played a particularly active role. Some banks reportedly offered up to 19x leverage for such deposits, it added. 


Most large domestic private sector banks have shied away from disclosing the amount of deposits mobilised under the scheme so far. Among state-owned banks, Punjab National Bank said it has garnered $425 million so far, and aims to mobilise $2.5 billion. Indian Bank has also set a target of $2 billion, having garnered $140 million until about a week ago. Indian Overseas Bank has mobilised deposits worth $300 million and aims for $650 million. The FCNR (B) scheme will be in force till September 30. 


State Bank of India had mobilised over $2.5 billion till a week back, although latest figures are not known, sources said.  


HSBC’s strong start in garnering FCNR (B) deposits stems from its structural advantage over other foreign banks. While most foreign banks have exited the retail banking business in India to focus on institutional clients, the London-headquartered bank has expanded its branch network, particularly in areas with a high concentration of NRIs, which are helping it to generate leads, sources told Business Standard. Customers are then referred to HSBC’s offshore centres, where the deposits and associated leverage are structured, they added. 


HSBC in 2025 said it had received approval from RBI to open 20 new branches at 20 locations, including cities like Amritsar, Ludhiana, Vadodara, Rajkot, Faridabad, and Navi Mumbai. So far, HSBC has opened six of those 20 branches, the latest being in Surat. HSBC plans to become one of the top five private banks in India. 


Sources added that HSBC is using the FCNR (B) scheme as an opportunity to deepen its NRI franchise by building long-term relationships with affluent cross-border clients. The strategy, they said, is to use FCNR(B) deposits as an entry point and, subsequently, encourage customers to open accounts in Gujarat International Finance Tec (GIFT) City, in Gujarat, where they can access international investment products and other cross-border banking services. 


While reports have suggested that HSBC is offering as much as 19 times leverage on FCNR (B) deposits, sources it is determined on a case-by-case basis by the relevant offshore centre, depending on the customer’s profile and discussions with the bank.

The sources highlighted that the bank has also aligned its internal capital allocation to India to support the scheme, as the country is one of the most important markets for the London headquartered bank globally. HSBC India’s nearly $1.9 billion in 2025 made the country the second-largest contributor to the international bank’s profit from Asia during the year, after Hong Kong. 



HSBC is using FCNR (B) as an opportunity to deepen NRI franchise

Unlike foreign peers, it has expanded its retail branch network in India

Branches in areas with high concentration of NRIs helping it to generate leads

Nearly $1.9 bn in 2025 made India second-largest contributor to the bank’s Asia profits after Hong Kong