The Central Bank of India, a prominent state-owned lender, has set an ambitious target to raise $400 million in foreign currency non-resident [FCNR (B)] deposits by September 30, 2026. This initiative is strategically aligned with a special window announced by the Reserve Bank of India (RBI) earlier this year, which permits banks to mobilize FCNR(B) deposits and convert them into rupees at a concessional swap rate.
Leveraging RBI's Special Window for Forex Reserves
The RBI's special swap facility, open until October 16, 2026, for deposits collected between June 8 and September 30, 2026, was designed to bolster India's foreign exchange reserves. This measure became crucial amidst rising crude oil prices and significant equity market outflows by foreign institutional investors, which had led to a rapid depreciation of the rupee. A key incentive for banks is that the RBI is bearing the full hedging costs, enabling them to offer highly attractive interest rates to non-resident Indian (NRI) customers.
Currently, Central Bank of India is offering a competitive interest rate of 6.60 percent for FCNR(B) deposits with a 5-year duration, which its officials state is among the highest offered by public sector banks. So far, the bank has successfully raised $8.4 million through this window.
Targeting NRI Customers with Extensive Outreach
To achieve its $400 million goal, the bank is rolling out multiple outreach programs specifically targeting its substantial NRI customer base, which includes 75,500 NRI customers holding 1.97 lakh accounts. Kalyan Kumar, the MD and CEO of Central Bank of India, detailed their strategy:
"Around Onam, we are going to conduct NRI meet at Thiruvananthapuram. During Ganesh festival, we will conduct NRI meet at Mumbai and Pune, and during Janmashtami we will have NRI meet in places like Ahmedabad, Jamnagar, Gandhinagar and Rajkot. We have created 159 NRI desks."
The bank has also established a dedicated helpline, helpdesk, and a 'war room' within its international banking division to enhance engagement with NRI customers.
No Significant Impact from West Asia Conflict on Asset Quality
Despite ongoing geopolitical tensions, particularly the conflict in West Asia, Central Bank of India has reported no major adverse impact on its credit demand or asset quality. Kumar noted that quarterly advances growth remained robust at approximately 3 percent, indicating resilience in demand. He affirmed, "In asset quality also, there has been no significant deterioration."
In response to the economic ramifications of the West Asia conflict, the government had introduced an Emergency Credit Line Guarantee Scheme (ECLGS) for affected industries. Central Bank of India has disbursed approximately Rs 4,500 crore under this scheme, with eligible accounts totaling around Rs 7,300 crore and over 25,000 applications received.
Strong Financial Performance and Growth Projections
The bank continues to demonstrate solid financial performance. In the April-June quarter, Central Bank of India reported a net profit of Rs 1,324 crore, marking a 13.3 percent increase year-on-year. Net interest income also saw a significant rise of 15.70 percent, reaching Rs 3,914 crore.
Total deposits grew by 11.7 percent to approximately Rs 4.79 lakh crore, while gross global advances surged by 28.6 percent to over Rs 3.54 lakh crore. For the current financial year ending March 2027, Kumar projects deposits to grow by 11-12 percent and credit growth to be in the range of 14-16 percent.