BENGALURU — An initiative by India’s central bank (RBI) aimed at strengthening dollar reserves has opened opportunities for the country’s small banks to offer more attractive interest rates and capture business from nonresident Indians (NRIs), a segment they have historically found challenging to engage.

Banks such as Equitas Small Finance Bank, AU Small Finance Bank, and IDFC First Bank are now offering NRIs interest rates up to 7.5%. This is notably higher than the 5.25% to 6% rates provided by larger institutions like the State Bank of India and the 6% offered by HDFC.

Some of these smaller banks are also planning to expand their services to include insurance and investment advice for NRIs in the future.

This development reflects a strategic move by smaller financial institutions to leverage RBI’s currency facility to attract lucrative deposits from the Indian diaspora.

Sources