SBI raises its FCNR (B) game with 9x leverage play under RBI scheme

The State Bank of India has rolled out a new facility under the RBI's FCNR(B) scheme, which allows for a 9x leverage play. This facility will be applicable to dollar-denominated deposits of $1 million and above, where for every $1 million deposited in an FCNR(B) account, SBI can extend loans of up to $9 million to customers against the deposit. The introduction of this facility is significant, especially given the current context of India's foreign exchange reserves falling sharply due to lower gold valuations. The FCNR(B) scheme is designed to attract foreign currency deposits into the country, and SBI's new facility is expected to make these deposits more attractive to investors. By offering a 9x leverage, SBI is providing customers with the opportunity to amplify their investments, which could lead to increased participation in the FCNR(B) scheme. The leverage facility will apply to deposits with a maturity period, and customers will be able to utilize the extended loans for various purposes. As the Indian economy continues to evolve, the introduction of such facilities is expected to play a crucial role in shaping the country's foreign exchange landscape. The decline in foreign exchange reserves has been a concern for the Indian economy, and measures like the 9x leverage facility under the FCNR(B) scheme are aimed at bolstering these reserves. The effectiveness of this facility will depend on its ability to attract significant foreign currency deposits and provide a boost to the Indian economy.