In trying to attract capital inflows, we may end up undermining external account stability

Foreign banks have facilitated most FCNR(B) deposits under the RBI's swap facility. This concessional swap facility has attracted over twenty billion dollars in total inflows. …

Banks are attracting NRI dollar deposits through RBI's FCNR(B) window. These deposits offer projected returns of thirteen to sixteen percent. Customers can borrow multiple times…