Indian banks raise over $136 bn via RBI forex swap, FCNR(B) deposits dominate inflows

India’s banking system attracted $136.38 billion in foreign currency inflows through the Reserve Bank of India’s special dollar-rupee swap facility by August 31, with foreign currency non-resident (FCNR(B)) deposits accounting for the overwhelming share.

Provisional data released by the RBI on Wednesday showed FCNR(B) deposits brought in $127.23 billion, while overseas foreign currency borrowings (OFCBs) contributed $5.26 billion and external commercial borrowings (ECBs) $3.89 billion. The figures are subject to final reporting, accounting and reconciliation.

Also Read: FCNR rush leaves banks swimming in ₹6.65 lakh crore liquidity


The latest data underscore the exceptionally strong response to the facility, which the RBI introduced on June 8 to attract foreign currency inflows and strengthen India’s external buffers. By August 21, banks had mobilised $65.4 billion through FCNR(B) deposits, while total inflows under the three routes had reached about $73 billion.

The strong response prompted the RBI to bring forward the closure of the FCNR(B) deposit mobilisation window to August 31 from September 30. The swap facility for eligible FCNR(B) deposits already mobilised remains available with the RBI until September 11, while the schemes for ECBs and OFCBs will remain open until December 31, 2026.

The sharp surge in longer-tenure FCNR(B) deposits also reflects banks’ willingness to tap overseas dollar funding while the RBI swap facility reduced the cost and risk associated with managing the foreign currency exposure.

The inflows have added substantially to banking-system liquidity and strengthened the RBI’s foreign exchange firepower. India’s banking liquidity rose to ₹6.65 lakh crore on August 31, its highest level since May 2022, with the weighted average call rate falling to 4.98%, well below the repo rate.

Also Read: Indian banks slash FCNR deposit rates by up to 310 basis points

The scale of mobilisation has far exceeded the response to the RBI’s 2013 FCNR(B) swap scheme, when banks raised about $26 billion through FCNR(B) deposits.

The RBI said the latest numbers are provisional, pending final reporting, accounting and reconciliation.