Mumbai, Oct. 19 (PTI): State Bank of India has received a lower-than-expected response so far to its two special schemes introduced for retaining Resurgent India Bonds (RIBs) proceeds as non-resident Indians (NRIs) preferred to park their funds in foreign currency non-resident (banks) (FCNR-B) accounts.
The rate on FCNR(B) deposits was cut to 0.25 per cent over Libor on Saturday.
“Customers are depending more on FCNR(B) deposits than the two special schemes launched to retain RIB redemptions worth $5.5 billion,” a senior SBI official said.
This phenomenon occurred possibly due to relationship of customers with particular bank branches. Also, the concept of an offshore banking unit was still new in the country, he added.
However, he refused to divulge the amount retained by NRIs with the bank.
SBI chairman A. K. Purwar had last month said Pravasi Samriddhi and Pravasi Vaibhav were introduced to retain 30-40 per cent (about $2 billion) of RIB proceeds, which matured on October 1. The schemes would remain open for a fortnight, he added.
The official said the bank was reviewing the time period for closing these schemes. They would remain open for some more time.
Asked whether the bank was confident of meeting their expectation of retaining around $2 billion, he said, “We are inching towards it.”