SBM Bank India, the Indian subsidiary of the SBM Group in Mauritius, mobilized about $100 million through the Reserve Bank of India’s recently concluded special foreign-currency non-resident bank (FCNR-B) deposit window.
Banks across the country raised $127.23 billion through the facility, one of the largest such deposit mobilization exercises in recent years.
The exercise was a “wonderful opportunity” for banks, helping SBM India strengthen its retail deposit franchise while bringing new customers into its fold, Amit Jagdhari, executive director and chief financial officer of SBM Bank India, said in an interview with Mint.
SBM Bank India initially offered interest rates of about 6.5% on the FCNR(B) deposits and increased them to about 8% towards the end of the mobilization period. The bank’s average cost of deposits mobilized through the exercise was about 7%, Jagdhari said.
That compared favourably with the bank’s domestic retail term-deposit funding cost, which averaged 7.25% during the period, he said. The deposits also offered regulatory and liquidity benefits to the bank.
“It is a term deposit. It is a 7% term deposit,” Jagdhari said, while explaining the economics of the funding.
The larger benefit, however, was customer acquisition. SBM Bank India was able to reach prospective customers in markets such as Africa and the UAE who had not previously banked with the lender. Even where prospective customers did not ultimately place deposits, the exercise helped raise awareness about the bank.
“We got new customers. Now we have a cross-sell opportunity,” Jagdhari said.
SBM India already has an NRI franchise across Africa, the UAE and Singapore and has offered FCNR(B) deposits for several years. The RBI window allowed the lender to scale up an existing business while broadening its customer base.
Deposit window
The RBI introduced the special dollar-rupee forex swap facility on 8 June for fresh FCNR(B) deposits with a maturity of three to five years. The facility was initially available until 30 September, but the central bank advanced the deadline to 31 August following a strong response. Swaps against deposits mobilized under the facility can be undertaken with the RBI until 11 September.
The amount mobilized by banks accounted for the overwhelming majority of the $136.37 billion raised through FCNR(B) deposits, overseas foreign-currency borrowings and external commercial borrowings.
FCNR(B) deposits are term deposits maintained by non-resident Indians in permitted foreign currencies. Unlike rupee-denominated NRE deposits, both the principal and interest on FCNR(B) deposits are denominated in foreign currency, protecting depositors from the risk of rupee depreciation.
For banks, the special window provided an opportunity to raise foreign-currency deposits while accessing the RBI’s concessional swap facility, giving lenders greater certainty over the currency risk associated with such funding.
The RBI lists SBM Bank India among foreign banks operating in India through the wholly owned subsidiary route. As of 31 March 2025, the bank had more than three million customers and 22 branches, while its employee strength stood at 748, according to its FY25 annual report.
Deposits, loans
About 80% of the bank’s loan book is focused on mid-market companies, while about 65% of its deposits come from the retail segment, Jagdhari said. On the retail side, the bank primarily targets affluent and emerging-affluent customers through deposits and wealth-management products.
The lender is expanding its MSME (micro, small and medium enterprise) franchise beyond Delhi, with a dedicated team and a focus on western and southern markets.
SBM Bank India’s asset growth is currently about 32% and the bank expects growth to remain broadly in the 30-35% range. Its loan book is about ₹12,000 crore, while quarterly disbursements are about ₹2,000 crore, primarily to companies, mid-market companies and small businesses, Jagdhari said.
“There are three critical ratios in the banking world that I follow—LCR (liquidity coverage ratio), capital adequacy ratio and cost-income ratio,” Jagdhari said.