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Informist, Tuesday, Sept. 1, 2026

 

By Diksha Tripathy 

 

MUMBAI – The total funds mobilised through the foreign currency non-resident (banks) deposits scheme may have surged to as much as $100 billion by the Aug. 31 deadline, despite the premature closure of the Reserve Bank of India's swap window, according to estimates by several market participants. The inflows through FCNR(B) deposits alone may have surpassed the RBI's estimate of $80 billion for three schemes combined, the other two being external commercial borrowings of public-sector undertakings, including banks, and overseas foreign currency borrowings.

RBI Governor Sanjay Malhotra had told the Financial Express that the central bank expects the three schemes to attract at least $80 billion. While market participants await the official data, most said FCNR(B) deposits through the swap window could have garnered anywhere between $85 billion and $100 billion.

"The flows were quite robust in the last week of August," a dealer at a private-sector bank said. "All banks received heavy flows, especially after the news that the deadline had been cut by a month to Aug. 31. (Inflows of) $100 bln just through FCNR(B) would not be a big surprise for the market."

 

Most of the 13 dealers and economists Informist spoke with estimated the inflows would be between $85 billion and $100 billion. Four of them estimated that the inflows would comfortably top $100 billion.

The RBI's measures to boost foreign capital inflows had attracted $72.85 billion as of Aug. 21, the central bank had said last month. Of this, nearly 90%, or $65.40 billion, came through FCNR(B) deposits. Banks had raised $4.86 billion through overseas foreign currency borrowings in the same period, according to RBI data, while external commercial borrowings by public-sector undertakings stood at $2.59 billion.

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

In August, the RBI revised the deadline for the FCNR(B) swap facility, saying it would remain available only until Aug. 31, against the earlier deadline of Sept. 30. The other two swap facilities--for external commercial borrowings by public-sector undertakings and offshore foreign currency borrowings by banks--will remain open until Dec. 31, as announced earlier.  End

 

Edited by Rajeev Pai

 

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