After RBI measures, banks offer up to 7% on dollar deposits

MUMBAI: Banks have begun passing on benefits from the Reserve Bank of India’s free hedging window to non-resident customers, pushing up Foreign Currency Non-Resident (Bank) deposit rates and, in the process, reopening a tidy arbitrage between offshore borrowing costs and onshore returns.Meta taps RIL for AI data centre capacityMeta taps RIL for AI data centre capacityNEW DELHI: Meta has signed its first artificial intelligence data centre deal in India, partnering with Reliance Industries on a 168-megawatt facility in Jamnagar, Gujarat, as technology companies race to secure the computing infrastructure needed to power AI applications.The agreement deepens a relationship that began with Meta’s $5.7 billion investment in Jio Platforms in 2020 and reflects growing interest among global technology firms in India’s emerging AI infrastructure ecosystem.Under the partnership, Meta will lease capacity at Reliance’s upcoming AI-enabled data centre, which is expected to become operational within two years. Reliance will be responsible for the design, construction, connectivity and day-to-day operations of the facility, while Meta will bear the cost of energy and water required for its workloads.Reliance said the facility will run on renewable energy and use desalinated seawater for cooling, part of a broader effort to address the significant power and water requirements associated with AI computing. The company added that the site can be expanded over time to support Meta’s growing global AI infrastructure needs.The deal comes at a time when technology companies race to secure data centre capacity for AI training and inference workloads. India has increasingly emerged as an attractive destination for such investments, supported by government incentives.According to government data, India’s installed data centre capacity has grown from around 375 megawatts in 2020 to about 1.5 gigawatts in 2025.The sharpest moves are visible among smaller lenders. Yes Bank has lifted rates by as much as 335 basis points, offering up to 7.1% on five-year dollar deposits. AU Small Finance Bank is quoting 7.1% for three-to-four-year tenures, while Karur Vysya Bank is at 7% for three-to-five-year deposits. Larger peers have moved more cautiously: HDFC Bank is offering about 6%, and Bank of Baroda around 6% for one-to-two-year money. Punjab National Bank has revised its FCNR (B) rates to as much as 6.1%, aligning with the central bank’s push to draw in foreign currency.The rupee gained nearly seven paise on Wednesday despite uncertainty taking a toll on equity markets. The new deposit window has opened up at a time when banks are seeing a rise in funding costs, which in turn has pushed up their marginal cost of lending rates. Bankers point out that at current rates, the return on dollar deposits is close to what NRIs were getting in rupee-denominated deposits. The scheme, though aimed at NRIs, has widened the funding playbook. Regulatory easing now allows overseas banks to extend large dollar loans to NRIs for parking into these deposits, effectively taking exposure to Indian banks.RBI allows banks to lend to REITSRBI has opened the door for banks to fund Real Estate Investment Trusts and Infra investment trusts, but only within tight guardrails. Final rules retain caps on exposure, asset-quality filters and repayment discipline. Overseas branches may join REIT financing via syndication, though with a 20% participation cap and a stiff 150% risk weight; the earlier insistence on an insolvency framework has been broadened to an “effective recovery” test abroad.