As West Asia boils again, RBI likely to assess FCNR flows

RBI Governor has called a meeting with bank CEOs on July 14 to assess FCNR deposit flows amid renewed Middle East tensions following the ceasefire collapse. Bank borrowing costs for on-lending to NRIs have risen 8-10 basis points in the last two days, with effective yields of 13-15% needed to attract diaspora deposits at current leverage levels. The meeting is also expected to cover ECBs, offshore dollar bonds, mule accounts, and cyber-security concerns.