
For example against a $1 million FCNR[B] deposits, a bank may lend upto $9 million to the customer which can then be placed as deposits [2] Arbitrage opportunity [3] Bankers said leverage ranged between five and nine times under a similar scheme introduced in 2013…. Courtesy same news in BS
Since lending rates are lower than deposit rates, customers can enhance their overall returns thru leverage. Courtesy same news item in BS