Leading Public Sector undertakings (PSUs) have requested the Reserve Bank of India (RBI) to extend its special concessional foreign exchange swap facility by three months past its current December 31 deadline to support capital expenditure.
In a recent high-level meeting with central bank officials, representatives from leading PSUs urged the regulator to keep the concessional window for External Commercial Borrowings (ECBs) operational through the final quarter of the financial year.
Industry sources familiar with the discussions highlighted that the bulk of annual capital expenditure and debt raising by public sector firms takes place in the fourth quarter. An extension through March 2027 would ensure uninterrupted access to lower-cost foreign currency hedging, facilitating higher mobilisation of funds for large-scale projects.
The central bank had originally introduced the special US dollar-rupee forex swap window in June to shore up the country’s foreign exchange reserves, stabilise the rupee, and ease balance-of-payments (BoP) pressures.
The swap window is available to banks too for mobilising deposits through Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs). Banks can raise Fresh Foreign Currency Non-Resident (Bank) or FCNR(B) deposits with a tenure of 3-5 years from June 8, 2026, to September 30, 2026.
According to SBI Research Report, India could attract overall foreign exchange inflows of $ 80-85 billion following RBI’s measures to encourage FCNR(B) deposits.