This article looks at the five bank stocks that could benefit from the RBI’s recent move, based on their exposure to the scheme and the views of leading brokerages. It also examines why these banks could see better growth prospects following the development.
The RBI’s latest move has drawn strong attention from the banking and financial markets, with investors now assessing which lenders are best positioned to benefit. Here, we look at the key beneficiaries and the brokerages backing them.
What did RBI actually do?
In June 2026, the RBI introduced a special USD-INR forex swap facility to attract foreign currency into India, strengthen forex reserves and support the rupee. The facility covered FCNR(B) deposits, External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings.
Under the facility, banks could bring in foreign currency through these routes and access the RBI’s swap arrangement. FCNR(B), or Foreign Currency Non-Resident (Bank) deposits, allows NRIs to keep their money with Indian banks in foreign currencies such as US dollars instead of converting it into rupees.
So what did the RBI offer?
Under the facility, banks could raise eligible foreign currency deposits from NRIs and swap the dollars with the RBI for rupees at concessional rates. This reduced the cost of hedging foreign currency for banks and made FCNR(B) deposits more attractive compared with normal deposit rates.
The FCNR(B) deposits covered under the facility were for a three- to five-year tenure, giving banks access to relatively stable foreign currency funding. The RBI effectively took on the principal amount of the foreign exchange swap, while the interest component remained outside the swap facility
And banks went much bigger than expected
The FCNR(B) scheme closed with $127.2 billion in accretion, while flows almost doubled in the last 10 days, taking total inflows from the special schemes to $136.4 billion or around Rs 12.82 lakh crore(assuming $1=Rs 94). FCNR(B) deposits accounted for over 93 percent of the total dollar inflows, according to provisional RBI data.
The strong close came after the RBI advanced the deadline for banks to accept incentive-laden FCNR(B) deposits to August 31, citing strong inflows through the scheme. The ECB and OFCBs swap scheme will continue until December 31, 2026, while the overall scheme was aimed at boosting dollar inflows and strengthening foreign exchange reserves.
The strong response to the scheme was also visible in the amount raised by individual banks. ICICI Bank brought in $17.9 billion, giving it a 14 percent share of total FCNR(B) inflows. SBI had raised $9 billion before the closure and is expected to cross its $10 billion target.
RBL Bank also saw a strong response, raising $3.4 billion through FCNR(B) deposits. This gave the bank a 2.7 percent share of total inflows, well above its nearly 0.5 percent share of deposits in the banking system.
Stocks Set to Benefit, According to Nomura and Motilal Oswal
ICICI Bank
ICICI Bank mobilised $17.9 billion, accounting for 14 percent of total FCNR(B) inflows, making it one of the largest contributors under the scheme. Motilal Oswal and Nomura both prefer ICICI Bank. Motilal expects FCNR(B) inflows to support credit growth, though near term margins may remain under pressure.
State Bank of India
SBI garnered $9 billion through FCNR(B) deposits and is expected to exceed its $10 billion guidance, according to Motilal Oswal. It has kept SBI among its top picks and expects system credit growth to reach 15.5 percent to 16 percent in FY27.
Kotak Mahindra Bank
Nomura prefers Kotak Mahindra Bank among large banks, expecting loan growth momentum to continue through the first half of FY27. Motilal Oswal has also named Kotak among its top picks, citing strong loan growth and the potential benefit from FCNR(B) deposits.
AU Small Finance Bank
Motilal Oswal has included AU Small Finance Bank among its top banking picks, along with ICICI Bank, SBI and Kotak Mahindra Bank. The brokerage expects system credit growth of 15.5 percent to 16 percent in FY27, creating a supportive environment for banking sector growth.
RBL Bank
RBL Bank mobilised $3.4 billion, capturing 2.7 percent of total FCNR(B) inflows, compared with its nearly 0.5 percent share of banking system deposits. Motilal Oswal said record FCNR(B) inflows could support faster balance sheet growth and earnings as banks deploy these deposits.
Conclusion
The RBI’s FCNR(B) move has brought in foreign currency far above initial expectations, creating a favourable backdrop for Indian banks. ICICI Bank, SBI, Kotak Mahindra Bank, AU Small Finance Bank and RBL Bank stand out based on their mobilisation and brokerage preferences. However, the impact on earnings will ultimately depend on how effectively banks deploy these funds and manage margins.