India urges public banks to attract diaspora foreign‑currency deposits

Finance Minister Nirmala Sitharaman has asked India’s public banks to intensify efforts to collect foreign‑currency deposits from non‑resident Indians (NRIs). The Reserve Bank of India has authorized banks to offer higher interest rates – up to 5.5‑7% – and to offset some foreign‑exchange risk costs, aiming to convert a portion of the roughly $120 billion in annual remittances into term deposits. With the rupee under pressure from a strong U.S. dollar, the government hopes the inflow will bolster foreign‑exchange reserves without resorting to external borrowing. Over 35 million Indians live abroad, and stablecoins such as USDT are increasingly used for remittances, posing competition to traditional banking channels. RBI Governor Shaktikanta Mandal is set to meet chief executives of both private and state‑run banks to finalize schemes that address operational challenges and expand outreach to the diaspora.