Indian banks have written to the Reserve Bank of India seeking permission to use a slice of non‑resident Indian (NRI) deposits as collateral for loans sourced from foreign banks. If approved, the scheme would let depositors tap overseas credit to park additional funds under the RBI’s non‑resident deposit incentive. They have also asked the RBI to publish a FAQ on the scheme in coming days.

Economists estimate the foreign‑currency non‑resident deposit programme could attract roughly $50 billion in capital, a lifeline as India’s balance‑of‑payments gap widens and oil import costs surge after the Middle East conflict. Banks are already offering five‑year deposits at up to 7.1% to lure overseas funds, while the RBI has previously allowed ‘mark‑to‑lien’ arrangements and letter‑of‑credit leverage.

The clarification request could unlock a new conduit for foreign capital, easing pressure on the rupee, which has slipped 6% this year, and offset the $30 billion equity outflows witnessed so far. A prompt RBI FAQ would signal regulatory support and likely spur banks to roll out the product within weeks. Analysts expect the move could narrow the current‑account deficit by several hundred million dollars.