SBI, HDFC or ICICI: Which Stock Will Benefit from RBI's FCNR Step? Brokerage Picks Top Bank Stocks to Buy

Bank Stocks To Buy: Banks with larger customer franchises and a stronger overseas presence are likely to benefit the most from the Reserve Bank of India's forex swap facilities announced recently. The measure is expected to encourage foreign capital inflows, strengthen forex reserves, and stabilise the USD/INR exchange rate, according to a report released by Motilal Oswal on Friday, June 12.

The RBI's forex swap facilities and FCNR (B) deposits measures have brought fresh optimism around bank stocks. Nifty Bank opened strong on Friday and was up 1.17% at 9:50 am on Friday. Canara Bank, HDFC Bank, Union Bank, Federal Bank, etc., were among the top Nifty Bank gainers during the intraday trading session.

RBI FCNR (B) Deposits Measure: Which Banks To Benefit The Most From RBI's Move?

Larger proportion of FCNR (B) deposits is expected to help lenders which have a wider and stronger network and a dominant presence internationally. "As per our interactions, the larger proportion of FCNR (B) deposits will be backed by leverage, and thus, banks with a large customer franchise and an overseas presence are better positioned to garner a higher share of inflows," noted Motilal Oswal in its report.

Overall, the recent forex swap facility will provide a support base to the falling Indian Rupee and is estimated to bring USD 40-50 billion of FX inflows in financial year 2026-27. These measures will also aid business growth for the banking system, but the improvement in profigtability ratios will depend on the sourcing quality, pricing discipline and in lenders' ability to deploy these funds into loans, highlighted the brokerage in its report.

Bank Stocks To Buy: Motilal Oswal Bets BIG On HDFC Bank, State Bank of India, ICICI, AU

While remaining optimistic about the bank stocks outlook due to recent RBI measure, Motilal Oswal maintained its bullish outlook on HDFC Bank, State Bank of India, ICICI and AU Bank.

"Strong business growth, robust asset quality and a stable currency outlook will help to ease FII selling pressure and boost sector performance. Top ideas: ICICIBC, HDFCB, SBIN and AUBANK," noted the brokerage firm in its report.

ICICI Bank Target Price

Motilal Oswal maintained a 'Buy' rating for ICICI Bank with a target price of Rs 1750 per share. The stock was trading 0.58% higher at Rs 1325 per share on BSE with a market capitalisation of Rs 9,50,288.77 per share at 10 am on Friday.

HDFC Bank Target Price

HDFC Bank also received a 'Buy' rating with a target price of Rs 1100 per share. The private lender stock was trading 2% higher at Rs 759.6 per share with a market capitalisation of Rs 11,68,989.52 crore at 10 am on BSE.

State Bank of India Target Price

Motilal Oswal gave a 'Buy' rating to State Bank of India (SBI) with a target price of Rs 1300 per share. The PSU bank stock was trading 0.81% higher at Rs 1009 per share with an Mcap of Rs 9,31,184.70 crore.