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Informist, Monday, Aug. 24, 2026

NEW DELHI – The Reserve Bank of India's measures to boost foreign capital inflows have attracted $73 billion since Jun. 8, sparking "unprecedented" foreign exchange inflows into India, the finance ministry said Monday. "FCNR(B) deposits (foreign currency non-resident bank deposits) alone accounted for $65.40 billion, underlining the overwhelming response of Non-Resident Indians to the scheme," the ministry said. 

"The scheme's success underscores the strength of the Indian diaspora, who have reposed faith in the Indian banking system and have once again demonstrated their enduring economic and emotional stake in India's growth story, channelling savings into FCNR(B) deposits at a pace that has consistently exceeded expectations," the ministry said. 

In a bid to boost inflows, the RBI in June announced a swap window where it will bear the hedging costs of banks converting capital raised through mobilising three- to five-year FCNR(B) deposits. It also rolled out swap facilities for public sector undertakings' external commercial borrowings and banks' offshore foreign currency borrowings, offering a concessional rate of 1.5% per annum. 

Banks raised $4.86 billion through overseas foreign currency borrowings between Jun. 8 and Sunday, and external commercial borrowings by public-sector undertakings were at $2.59 billion, as per RBI data. The RBI has set a target of raising $90 billion through the three facilities by the end of 2026.

"The response has been strong enough for the RBI to advance the closure of the FCNR(B) window itself, from September 30 to August 31, 2026, having already achieved its objective ahead of schedule," the ministry said. The RBI's swap facility for FCNR(B) deposits will now be available for deposits mobilised till Aug. 31, against the previous deadline of Sept. 30. The other swap facilities by RBI--for the external commercial borrowings of public-sector undertakings and offshore foreign currency borrowings of banks, will remain open till Dec. 31, as announced earlier. 

According to the finance ministry, the $73 billion forex inflows under these schemes in less than eleven weeks stand out as "the largest and fastest" foreign-currency mobilisation exercises undertaken by India, comfortably surpassing the scale and pace of the RBI's 2013 FCNR(B) swap scheme. 

This mechanism was last deployed in 2013, when then-RBI governor Raghuram Rajan announced an FCNR deposit window to attract inflows. The scheme, under which the RBI had swapped dollars raised by banks via FCNR deposits at concessional rates, successfully mobilised about $26 billion in roughly three months, helping stem the rupee's fall, which was then reeling under the 'Taper Tantrum'.

The RBI had announced the swap facilities this time to attract foreign capital as the rupee came under pressure from a surge in crude oil prices and strong foreign capital outflows following the outbreak of war in West Asia at the end of February. During Jan-May, foreign portfolio investors pulled out $24.67 billion from Indian markets, more than triple the $7.6 billion withdrawn in the corresponding period last year. "By securing large-scale, long-term non-resident deposits and commercial institutional funding entirely on tap, the Government of India has fortified its external buffers with maximum cost-efficiency," the ministry said.  End

US$1 = INR 95.75

Reported by Priyasmita Dutta

Edited by Deepshikha Bhardwaj

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