Reserve Bank of India (RBI) Governor Sanjay Malhotra (file photo)
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The Reserve Bank of India (RBI) used its latest interaction with bank chief executives to push lenders on four areas—strengthening fraud detection mechanisms to tackle mule accounts; accelerating credit growth beyond financial inclusion; improving mobilisation of FCNR(B) deposits and examining a relaxation in gold loan norms.FCNR(B) deposit mobilisation emerged as one of the focuses of the meeting, with the RBI seeking explanations from banks on muted inflows despite a sharp rise in deposit rates. FCNR(B) rates have increased from around 3.75 per cent to 6-6.5 per cent, but deposits have not grown proportionately.FCNR PushGovernor Sanjay Malhotra urged banks to maximise FCNR(B) deposits, although no formal mobilisation targets were set. The push follows discussions with the Finance Minister and PSU bankers on Monday and is aimed at boosting overseas dollar inflows amid pressure on the rupee. Another banker said the RBI today has sought detailed data on FCNR(B) deposits from lenders.Bankers estimated that around $6-8 billion has already been mobilised under the scheme, though markets had expected faster and larger inflows. While NRI interest remains steady, higher funding costs have dampened demand for leveraged products.Lenders also highlighted tax-related challenges. In Singapore, investors face a 10 per cent withholding tax on interest income, reducing the attractiveness of FCNR(B) deposits. Similar constraints in the US have limited banks’ ability to attract sizeable flows, leaving Hong Kong and Dubai as the most viable markets for deposit mobilisation.Banks further pointed to elevated global funding costs, tighter liquidity and intense competition as factors making overseas fund-raising more difficult. Despite these hurdles, treasury officials remain optimistic that additional FCNR(B) inflows could support the rupee in the coming weeks.The RBI also raised concerns over the growing use of mule accounts in digital fraud, urging banks to strengthen monitoring and surveillance systems. Lenders were advised to enhance fraud detection capabilities and identify suspicious transactions at an early stage as digital payments continue to expand.Fraud PreventionThe meeting also saw deliberations on whether a brief delay in crediting transactions could help curb payment frauds. While bankers noted that any broad-based delay may be difficult given customers’ expectation of instant payments, a threshold-based approach — allowing instant credits for smaller transactions and introducing a short delay for higher-value transfers — was discussed.Another major theme was the shift from financial inclusion to what RBI officials described as financial expansion. The central bank emphasised the need to increase credit flow to retail borrowers and micro, small and medium enterprises (MSMEs), ensuring that gains from financial inclusion translate into productive lending and economic activity. Discussions focused on how banks could deepen credit penetration among underserved segments.The meeting also touched upon gold loans, with discussions around raising the existing ₹2 lakh threshold, a move that could broaden access to credit against household gold and support retail borrowers.Published on July 14, 2026
