RBI’s Foreign Currency Swap schemes receive positive response from NRIs in Singapore, HK, West Asia, U.K., U.S.: PSB chiefs

Finance Minister asks banks to intensify outreach to NRI diaspora and introduce innovative deposit products to maintain the pace of mobilisation

Source

The Hindu — Business →

Quick Revision

Prelims-testable facts

01The RBI has revived the FCNR(B) swap scheme to attract foreign currency inflows into India.
02The FCNR(B) swap scheme allows NRIs to deposit foreign currency in Indian banks at a fixed interest rate for a specified period.
03The RBI's Foreign Currency Swap schemes have received a positive response from NRIs in Singapore, Hong Kong, West Asia, the UK, and the US.
04Finance Minister Nirmala Sitharaman has asked banks to intensify outreach to the NRI diaspora to maximize mobilization under the FCNR(B) scheme.
05The RBI's FCNR(B) scheme is a tool used to attract foreign capital inflows into India by offering concessional swaps for NRIs and state-owned companies.
06The Reserve Bank of India has introduced new foreign exchange measures, including special swap facilities for PSUs and NRI deposits.

Trap alerts

Most people think the RBI's FCNR(B) scheme is a new initiative, but actually it was revived after a 13-year hiatus.
Most people think the RBI's Foreign Currency Swap schemes are only for NRIs, but actually they also offer special swap facilities for state-owned companies.

Mains Practice Question

Examine the role of RBI's Foreign Currency Swap schemes in mobilizing deposits from NRIs and critically analyze their potential impact on India's foreign exchange reserves.

250 words

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Prelims Practice MCQs

Single factmedium

The Finance Minister asked banks to intensify outreach to which diaspora?

A.Indian diaspora
B.NRI (Non-Resident Indian) diaspora
C.Pakistani diaspora
D.Bangladeshi diaspora

The Finance Minister asked banks to intensify outreach to the NRI (Non-Resident Indian) diaspora, as part of efforts to mobilize deposits.

Multiple statementsmedium

Consider the following statements regarding RBI's Foreign Currency Swap schemes: 1. The RBI's Foreign Currency Swap schemes have received a positive response from NRIs in Singapore. 2. The Finance Minister has asked banks to intensify outreach to the NRI diaspora. 3. The RBI's Foreign Currency Swap schemes have been introduced for the first time this year. How many of the above statements are correct?

A.Only one
B.Only two
C.All three
D.None

Statement 1 is correct because the text mentions that NRIs in Singapore have responded positively to the RBI's Foreign Currency Swap schemes. Statement 2 is correct because the Finance Minister has indeed asked banks to intensify outreach to the NRI diaspora. However, Statement 3 is incorrect as it contradicts the fact that the RBI's Foreign Currency Swap schemes have been receiving a positive response from NRIs in various countries for some time.

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