Latest data shows strong overseas Indian response as total foreign currency inflows cross $40 billion
The Reserve Bank of India’s (RBI) special foreign currency mobilisation programme has attracted strong interest from Non-Resident Indians (NRIs), with Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits reaching $36.7 billion within just 52 days of the scheme’s launch, according to the central bank’s latest data.
The RBI’s update showed that the overall inflow under its concessional swap facility stood at $40.8 billion as of July 31, with FCNR(B) deposits accounting for the bulk of the funds. The remaining inflows came through overseas borrowings by banks and public sector enterprises.
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The special measures were introduced in June to strengthen India’s foreign exchange reserves, support the rupee and improve the country’s external financial position
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Under the scheme, banks can mobilise fresh FCNR(B) deposits with tenures of three to five years and swap the foreign currency with the RBI at concessional terms, significantly reducing their hedging costs
The scheme has prompted banks to offer more attractive returns on eligible dollar deposits, encouraging NRIs to channel overseas savings into India’s banking system. Analysts say the lower hedging costs have enabled lenders to increase deposit rates while providing depositors protection against currency fluctuations.
The latest figures indicate that the mobilisation has already surpassed the foreign currency deposits raised during the RBI’s 2013 special FCNR(B) initiative, highlighting the strong response despite a challenging global interest rate environment.
Market experts believe the continued inflow of overseas funds will help bolster India’s foreign exchange reserves and provide additional support to the rupee. The RBI’s special swap window for eligible FCNR(B) deposits is scheduled to remain open until September 30, 2026, allowing banks to continue mobilising foreign currency deposits from NRIs.
