Canara Bank has announced plans to raise between $2.3 billion and $2.5 billion in foreign currency funding through a combination of FCNR(B) deposits and overseas borrowings. The bank aims to secure $1.3–$1.5 billion specifically via FCNR(B) deposits by September 2026, with the remainder coming from external commercial borrowings (ECBs) and overseas foreign currency borrowings (OFCBs).
As of July, the bank has already raised approximately $775 million through the FCNR(B) window and mobilized nearly ₹7,300 crore under the scheme. This fundraising initiative follows the Reserve Bank of India’s (RBI) decision to lift the interest rate cap on fresh FCNR(B) deposits with tenures of three to five years. The special deposit window remains open until September 30, 2026, and banks can increase overseas borrowings under RBI guidelines until December 31, 2026.
Strong Q1 FY27 Performance
Canara Bank reported robust business growth for the quarter ending June. Total advances grew 18% year-on-year to ₹12.93 lakh crore, while total deposits rose 12% YoY to ₹16.11 lakh crore. Global business value increased 14% to ₹29.05 lakh crore. Net interest income (NII) reached ₹10,215 crore, marking a 13% increase. Managing Director Brajesh Kumar Singh noted that NII crossed the ₹10,000 crore milestone for the first time in a quarter.
Improving Asset Quality
The bank’s asset quality continued to strengthen. Gross non-performing assets (GNPA) fell to 1.57% from 2.69% a year ago, and net NPAs declined to 0.36% from 0.63%. The provision coverage ratio (PCR) improved to 94.76%. Credit quality gains were supported by a lower slippage ratio of 0.60% and recoveries of ₹2,500 crore during the quarter.
Analysts expect the combination of stronger profitability, healthier asset quality, and additional foreign currency funding to bolster Canara Bank’s lending capacity and liquidity position in the coming quarters.
