Indian Banks Mobilise $72.8 Billion Through RBI Forex Swap Scheme

Indian banks have mobilised $72.848 billion in foreign currency inflows under the Reserve Bank of India’s (RBI) special forex swap facility up to August 21, with FCNR(B) deposits accounting for the bulk of the funds.

According to the RBI, authorised dealer banks raised $65.397 billion through Foreign Currency Non-Resident (Bank) or FCNR(B) deposits. Another $7.451 billion came through External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs) under the central bank’s swap facility.

The RBI introduced the special USD-INR forex swap facility on June 8, 2026, with the objective of encouraging dollar inflows into the Indian banking system and strengthening the country’s foreign exchange position.

The central bank said the scheme will remain open for FCNR(B) deposits until August 31, while the window for ECBs and OFCBs will continue until December 31, 2026.

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The strong response to the scheme comes after Indian banks increased efforts to attract FCNR(B) deposits, including by offering more attractive interest rates. The RBI had originally planned to keep the FCNR(B) swap window open until September 30 but brought the deadline forward by a month, citing the encouraging response and the inflow of the required foreign exchange.

The early closure has led to speculation that the RBI may have already achieved its dollar mobilisation target. An SBI Research report earlier estimated that inflows under the FCNR(B) scheme had already reached around $57 billion and suggested that another $25-30 billion could come in before the August 31 deadline, potentially taking total mobilisation to about $85 billion.

The report also argued that the cost of the swap facility was unlikely to have been the reason for bringing forward the deadline. It estimated that the cumulative cost could be around 15 per cent of the corpus, or approximately $10.5 billion, but noted that this should be assessed against the overall size of India's foreign exchange reserves rather than the FCNR(B) corpus alone.

The latest inflows are already strengthening India's external liquidity position. RBI data released on Friday showed that the country's foreign exchange reserves increased by $9.905 billion to $716.90 billion in the week ended August 14.

The increase followed a sharp $14.1 billion rise in the previous week, when reserves reached around $707 billion, their highest level in the current financial year.

The recent surge in reserves reflects, among other factors, the growing inflows generated through the RBI's FCNR(B) initiative. The strong response to the scheme provides Indian banks with an additional source of foreign currency liquidity at a time when movements in the rupee and global financial markets remain closely watched.