Bank of Baroda raised $273 million, followed by Canara Bank and Punjab
GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims·
Why in news
Major Indian public and private sector banks (BoB, Canara, PNB, SBI, HDFC, Axis) mobilized significant foreign-currency resources to bolster liquidity and capital.
Background
Bank of Baroda raised $273 million, while Canara Bank and PNB raised $80 million each. SBI mobilized approximately $1.9 billion through bond issuances and FCNR(B) deposits swapped with the RBI.
Facts for Prelims
- FactBank of Baroda raised $273 million in foreign-currency resources.
- FactSBI raised approximately $1.9 billion through bond issuances and FCNR(B) deposits.
- FactHDFC Bank and Axis Bank raised $750 million and $800 million respectively via bond issuances.
- BodyFCNR(B) deposits are held by banks and swapped with the RBI to manage foreign currency liquidity.
For Mains
Q. Discuss the significance of mobilizing foreign-currency resources for Indian public sector banks and the role of the diaspora in strengthening the nation's capital reserves.
Dimensions to cover in your answer
- Liquidity management: Utilizing FCNR(B) deposits and bond issuances to mitigate currency volatility and meet capital requirements.
- Diaspora engagement: Leveraging the Indian diaspora as a stable source of long-term capital and investment for PSU banks.
- Capital market integration: The shift towards bond issuances as a primary vehicle for raising large-scale foreign currency resources.
Keywords: Liquidity Management · FCNR(B) Deposits · Capital Mobilization · Public Sector Banks · Bond Issuance
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