RBL Bank's stock reached a new 52-week high on Wednesday and has gained nearly 9% in September to ₹412.50. According to reports from Stock Market News, this rally follows the bank's successful fundraising under the Foreign Currency Non-Resident (B) deposits scheme, which ended on 31 August. The strong market performance reflects investor excitement over the bank's ability to significantly expand its deposit base through international funding sources.
RBL Bank raised ₹32,472 crore in FCNR(B) deposits under the scheme, as reported by Stock Market News. The deposits have substantially expanded the bank's total deposit base by 26% from ₹1.25 trillion at the end of the June quarter (Q1FY27). This compares favorably with rival IDFC First Bank, which also raised ₹33,975 crore under FCNR(B) but saw its total deposit base increase at a comparatively lesser rate of 11%. Notably, RBL has disclosed the break-up of unleveraged and leveraged deposits, a data point that other banks have not shared.
According to Stock Market News, RBL has already used ₹10,309 crore as collateral for lending against FCNR(B) deposits, with the net inflow available for fresh lending at ₹22,163 crore. FCNR(B) deposits are exempt from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements, allowing the entire amount to be used for lending. The bank's average yield on advances stands at about 11.2% based on Q1FY27 figures, potentially generating a net interest spread of about 5%. This could boost net interest income by approximately ₹1,100 crore per annum, representing about 15% of the likely NII of FY27.
As reported by Stock Market News, while RBL's FCNR(B) fundraising solves the liability growth issue temporarily, it does not eliminate the need to build a sustainable domestic deposit franchise. The bank currently operates 628 branches, which is about half of similar-sized banks such as IDFC First and Yes Bank. However, RBL has 1,339 business correspondent branches that could facilitate deposit mobilization without incurring full-fledged branch costs. The bank trades at 21x FY28 earnings estimates of ICICI Securities, significantly higher than IDFC First Bank's 12x and Yes Bank's 14x valuations, suggesting the FCNR(B) earnings boost may already be reflected in current pricing.
