Banks have mobilised an impressive $17.41 billion through foreign currency non-resident (Bank) or FCNR(B) deposits under the Reserve Bank of India’s (RBI) special swap scheme, highlighting steady foreign exchange inflows since the central bank opened the facility on June 8 to bolster India’s balance of payments and support the rupee.
Overall, India received $20.72 billion in foreign exchange inflows through FCNR(B) deposits, external commercial borrowings (ECBs) and overseas foreign currency borrowings (OFCBs) till July 17, according to RBI data released on Monday.
Of the total, banks raised $1.97 billion through OFCBs and $1.34 billion via ECBs.
The RBI had announced the concessional swap facility on June 5 as part of a broader package of measures aimed at shoring up foreign exchange inflows. The facility became operational on June 8 and will remain available until September 30 for FCNR(B) deposits and until December 31 for OFCBs and ECBs.
“The swap facility has seen strong interest and attracted steady forex inflows since June 8,” the RBI said in a statement.
Banks have been aggressively marketing FCNR(B) deposits to non-resident Indians by offering leverage schemes that allow customers to borrow against their own deposits and reinvest the proceeds. Most lenders are offering leverage of up to nine times, while HSBC has increased it to as much as 19 times.
“The flows look strong and are on track to reach $50-60 billion by the time the FCNR(B) scheme closes in September. Banks have until December to raise funds through the other two routes, which will further support deposit growth and provide ample liquidity to the system,” said a senior SBI official. Reports suggest SBI has mobilised around $2 billion under the scheme.
Market participants estimate that total inflows through the three channels could eventually reach around $80 billion.
“In the whole of FY26, banks raised less than $1 billion through FCNR(B) deposits. This is a striking turnaround, and at the current pace cumulative inflows of $45-50 billion by end-September appear well within reach — a powerful tailwind for the rupee,” said Anindya Banerjee, head of research, commodities and currency derivatives at Kotak Securities.
He noted that elevated crude oil prices and a strong US dollar continue to keep the rupee under pressure at around 96.45. “A cooling in oil prices should tilt the balance decisively in favour of the rupee,” he added.
Under the scheme, the RBI is bearing the entire swap premium, or hedging cost—estimated at 3-3.5%—for fresh US dollar deposits. This enables banks to pass on the benefit directly to depositors.
“The mobilisation of $20 billion is positive for the rupee and should provide support to the currency. We should be able to reach total collections of $50-80 billion by the time the scheme concludes,” said Alok Singh, head of treasury at CSB.
The RBI has also removed the interest rate ceiling on FCNR(B) deposits, allowing banks to price these deposits freely. As a result, interest rates on three- to five-year FCNR(B) deposits now range between 6% and 6.6% at large banks, while some smaller lenders are offering rates of up to 7.8%.
While private sector banks have not disclosed mobilisation targets under the RBI scheme, several state-owned lenders have. Punjab National Bank expects to raise $2-2.5 billion, Indian Bank is targeting $2 billion, and Central Bank of India aims to mobilise $400 million.