Mumbai, Aug. 21 -- Indian banks are racing against time to raise funds before the Reserve Bank of India's early closure of its foreign currency non-resident bank, or FCNR(B), deposit scheme, but the influx of dollars could leave some lenders scrambling for avenues to deploy them, potentially pushing up borrowing costs, three senior treasury officials said.

The RBI's decision to close the scheme a month early has compressed into a few days transactions that banks had expected to execute over a longer period. So far this week, ICICI Bank, Kotak Mahindra Bank and IDFC First Bank have tapped the offshore market since the RBI announced the closure of the FCNR(B) deposit swap facility on Friday, as banks seek to raise funds and complete deals ...