Bank of India is seeking to raise $1.2 billion in foreign currency non-resident deposits (FCNR-B) under the special Reserve Bank of India-driven exercise to boost dollar inflows. It plans to garner another $2 billion through overseas borrowings.

The state-owned bank has already raised $200 million through the FCNR-B window, managing director Rajneesh Karnatak said, after announcing a 36% year-on-year jump in first quarter net profit at Rs 3,068 crore.

Central bank data showed that until July 17, Indian lenders had collectively garnered nearly $21 billion in multiple dedicated programs aimed at boosting the forex flows.

If the bank achieves the $1.2 billion FCNR-B target, this would translate into Rs 10,000-11000 crore.

"This would help us substitute the reliance on bulk deposits and therefore the cost of deposits may come down," Karnatak said. BoI is offering up to 9% leverage to its non-resident customers to maximise deposit mobilisation through the special window.

Responding to ET's query, he said there could be savings of 50-60 basis points on deposit costs in respect to bulk deposits.

The bank's operating profit rose 26% year-on-year at Rs 5,051 crore, backed by a 12.6% rise in net interest income at 6,833 crore and a 19% rise in non-interest income at Rs 2,579 crore.

Its net interest margin for the quarter stood at 2.52% against 2.55% in the year-ago period.

Its advances grew about 18.6% year-o-year to Rs 7.98 lakh crore while deposits grew 14.9% to Rs 9.58 lakh crore. The bank's gross non-performing assets improved 111 basis points to 1.81% at the end of June.

The MD said that the bank has established a dedicated centralised sales vertical to drive business growth and operational reach as well as a strategic business branch in Mumbai for high value business.