Bank of Baroda is planning to replace around ₹17,000–18,000 crore of bulk deposits with FCNR(B) deposits, which are funds deposited by NRIs in foreign currencies like USD.
Why the bank is doing this:
- Bulk deposits (from corporates/institutions) are usually costly and short-term
- FCNR(B) deposits are more stable and can be cheaper, especially with RBI support for hedging
What this means:
- The bank will reduce its cost of funds
- Improve financial stability
- Depend more on NRI deposits instead of large institutional moneyIn simple words:
Bank of Baroda is shifting to a safer and more cost-efficient funding source, which is a positive move for its overall financial health.
economictimes