RBI offers concessional swaps for PSUs, NRI deposits to drive forex inflows

MUMBAI: The Reserve Bank of India announced a series of forex measures last week, including offering concessional swaps to encourage overseas fundraising by state-owned firms and foreign currency non-resident deposits.

The swap facility will ‌be provided ⁠until September ⁠30 to compensate banks for hedging costs on three- to five-year foreign currency non-resident deposits.

Here are the detailed guidelines ​published by the RBI on Monday.

• The RBI has allowed banks to mobilize deposits in any ​freely convertible currency
• Swap facility ⁠will be ‌available in U.S. dollars only
• The ​swap ​facility comes into effect immediately and will ⁠remain open up to October 16, 2026 ​for deposits mobilized till September 30, ​2026.
• Underlying deposits will have a lock in-period of 1 year.
• Swap facility with the RBI cannot be cancelled
• Banks may exclude the swap positions arising out of FCNR (B) deposits, External ‌Commercial Borrowings while computing net open rupee position
• External commercial borrowings of average ​maturity of ​3 years ⁠and above by public sector undertakings will be eligible for the RBI swap facility
• Swap will be undertaken ​at a fixed rate of 1.5% per annum compounded semi-annually
• Swap facility comes into effect from today and will remain open up to January 15, 2027 for eligible ECB drawdowns