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| According to market sources, while one product is meant for deposits received in India, the other is for deposits received at overseas centres. |
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| Both the products mature in a year. The Indian rupee deposit comes with an in-built hedge for exchange rate risk. |
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| Under the scheme, dollar deposits will be converted into rupees and a exchange rate risk provided for the entire period. |
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| The depositor will get rupee interest rates, as applicable on NRE deposits, with the entire exchange rate risk covered by the bank, on maturity. |
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| The other product will be similar to foreign currency-denominated deposits raised at overseas centres. |
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| The bank proposes to offer rates in excess of the London Inter-Bank Offered rate (Libor) for deposits accepted overseas. |
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| In India, banks can offer rates on FCNR(B) deposits at a few basis points lower than LIBOR, sources said. |
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| SBI expects to mop up most of the dollar deposits of the RIB redemption through these schemes. |
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| According to market sources, some banks are also working out similar products to tap dollar deposits during the time RIBs come up for redemption. |
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| This is because NRI depositors are less likely to get any other avenue offering rates as lucrative as in India, sources added. |
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| The SBI and Reserve Bank of India together have worked out adequate arrangements so that the market does not get affected from dollar outflows and subsequent absorption of rupee funds. |
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| SBI raised a total $4.2 billion from RIB and over five years, this corpus has grown to over $5 billion including interest. |
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| The SBI has invested the rupee equivalents in 91-day treasury bills maturing around the redemption period and has entered into reverse repos with RBI to arrange the rupee funds. |
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| These rupee funds will be in turn swapped with the RBI to raise the dollar equivalent to pay back the bond holders. |
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| The RBI, in turn, has entered into forward contracts with market players to book the dollars so as to prevent any undue volatility in the market. |
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