Finance Minister Nirmala Sitharaman is set to meet public sector bank (PSB) chiefs on Monday to review efforts to attract foreign currency deposits. The Reserve Bank of India (RBI) has removed interest rate ceilings on 3-5 year Foreign Currency Non-Resident (Bank) deposits until September 30, aiming to reverse a sharp decline in inflows, which dropped to USD 946 million in FY26 from USD 7.1 billion in FY25.

The meeting, scheduled for July 13, will also cover Overseas Foreign Currency Bonds and External Commercial Borrowings (ECBs). The RBI is offering a concessional foreign exchange swap facility for FCNR(B) deposits and ECBs, significantly reducing hedging costs for banks and incentivizing PSU borrowing until September 30, 2026. This initiative is expected to boost ECB issuances, which saw a 30% decline in FY26.