Foreign Deposits and Swaps Attract $21 Billion in 40 Days
MUMBAI: The Reserve Bank of India (RBI) has reported that $20.7 billion has been raised through its concessional swap facility for Foreign Currency Non-Resident (Bank) deposits, Overseas Foreign Currency Borrowings (OFCBs), and External Commercial Borrowings (ECBs) as of July 17. This figure reflects strong investor interest following the scheme’s announcement on June 5 and its operational launch on June 8. Bankers anticipate that total mobilization could reach between $80 billion and $85 billion by the end of the swap window.
Of the total amount raised, $17.4 billion originated from FCNR(B) deposits, $2 billion from OFCBs, and $1.3 billion from ECBs. The facility for FCNR(B) deposits will remain open until September 30, while the windows for OFCBs and ECBs will close on December 31. The RBI’s disclosure of the $20 billion raised under the FCNR(B) scheme is viewed as a strategy to manage market perceptions and enhance credibility, especially as the rupee approached its record low.
Senior executives from private banks indicated on July 18 that inflows from FCNR(B) deposits might fall short of initial projections due to factors such as non-resident Indian (NRI) tax treatment, liquidity issues, and regulatory constraints in key markets like the UAE. They also noted operational limitations affecting Indian banks’ representative offices in the Gulf region. The RBI did not disclose the names of the banks or the specific jurisdictions contributing to the deposits. Bankers suggested that significant amounts likely came from tax-free jurisdictions, with leverage playing a crucial role.
RBL Bank reported raising $150 million under the FCNR(B) scheme, while other private banks have not disclosed their collections. Indian Bank’s Managing Director and CEO, Binod Kumar, stated that the bank aims to secure $2 billion in FCNR(B) deposits by the end of September 2026, with a current pipeline of nearly $1 billion. However, actual deposits stood at $150 million as of last week. State Bank of India is reportedly offering leverage to depositors through its GIFT City International Banking Unit.
Central Bank of India’s MD and CEO, Kalyan Kumar, mentioned that the bank has mobilized approximately $8.4 million under the special FCNR(B) window and is targeting around $400 million by September 2026, also utilizing leverage through its international banking unit at GIFT City. Union Bank of India’s MD and CEO, Asheesh Pandey, confirmed that the bank has raised about $106 million under the FCNR(B) scheme and is aiming for $1.5 to $2 billion by September 2026. He noted that FCNR(B) deposits are being used to gradually replace wholesale deposits and support current account savings account (CASA) growth.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
Follow Us on Twitter, Instagram, Facebook, & LinkedIn
