New Delhi, June 29 -- Indian banks are likely to use foreign-currency deposits raised from NRIs (Non Indian Residents) in the next few months to replace expensive funding on their balance sheets before lending money to companies, according to Axis Bank's chief executive officer Amitabh Chaudhry.

The remarks come as lenders prepare to benefit from the Reserve Bank of India's (RBI) recent policy measures, which are aimed at encouraging banks to attract more foreign currency deposits from the Indian diaspora.

"The first thing banks will do is reduce or pause growth in other very expensive deposits for some time," Amitabh Chaudhry told Bloomberg News in an interview.

Following that, the quickest areas for deployment of fresh funds would be...