Setty’s comments addressed concerns about money entering banks through foreign currency deposits. His message was that a large inflow should not be read as a signal of an immediate jump in lending. The absorption of those funds would happen progressively rather than all at once.

The report links the foreign capital inflows to a swap facility offered by the central bank. Commercial banks received sizeable deposits under the FCNR(B) route. Against that backdrop, Setty pointed to a gradual adjustment over the coming months, rather than a sharp expansion in credit driven by the incoming funds.

The key distinction in his remarks is between banks receiving deposits and those inflows translating into more lending. Although the headline figure is $127 billion, the supplied account does not give a bank-wise breakdown or an exact schedule for absorption. It also does not set out a lending growth estimate associated with the inflow.