Foreign deposit redemption of $24 bn a 'time bomb': Subramanian Swamy

NEW DELHI: BJP MP Subramanian Swamy today termed the USD 24 billion redemptions due to foreign investors this month as a "time bomb" and said the Finance Ministry has to cough up the amount guaranteed by RBI Governor Raghuram Rajan.

When the rupee had plunged to a life-time low in 2013 and was in a free fall due to the US 'taper tantrums', India had mobilised $26 billion through foreign currency non-resident bank account (FCNR-B) deposits by offering a special swap window for banks. The three-year deposits will mature this month.

"MoF has to cough up $24 billion to redeem the R3-guaranteed FCNR deposits of NRIs by Sept end. Time bomb," Swamy said in a tweet.

R3 is the acronym he uses for references to Raghuram Rajan, whom he had on several occasions attacked for keeping interest rate high and purportedly hurting growth.

Rajan's three-year term comes to an end on September 4.

The governor had earlier said he expects there would be outflows of $20 billion to repay people on maturity of FCNR-B deposits.

Rajan announced the scheme on the evening of September 4, 2013, the day he took over, and it was considered to be his masterstroke to help stabilise the rupee.