MONEY
Record $127-bn foreign currency deposits flood banks as FCNR(B) window shuts
- IBJ Bureau
- Sep 03, 2026
India has mobilised a record $127.23 billion through foreign currency deposits under the Reserve Bank of India’s (RBI) special Foreign Currency Non-Resident (Bank) [FCNR(B)] programme.
The massive inflow has prompted the central bank to close the programme on August 31 a month ahead of schedule after achieving its liquidity objective.
The FCNR(B) schemes has garnered deposits of $127.23 billion as of August 31.
Besides, authorised commercial banks have raised $5.26 billion through overseas foreign currency borrowings (OFCBs), while public sector undertakings and private companies have mopped up $3.89 billion through external commercial borrowings (ECBs), taking the total mobilisation via the three windows to $136.38 billion.
The scale of the FCNR(B) mobilisation is particularly striking when compared with the RBI’s intervention during the 2013 “taper tantrum” crisis.
The special FCNR(B) swap window launched then had mobilised about $26 billion over nearly three months as India battled severe pressure on the rupee.
At $127.23 billion, mobilisation through the latest FCNR(B) window is nearly five times the amount raised under the comparable 2013 initiative.
FCNR(B) accounts allow non-resident Indians to maintain fixed deposits with Indian banks in designated foreign currencies.
Since both principal and interest are denominated and repaid in foreign currency, depositors do not directly bear the rupee exchange-rate risk.
The programme was structured to encourage banks to mobilise foreign currency from overseas Indians while strengthening foreign exchange (forex) liquidity in the domestic financial system amid huge forex outflows.
The RBI’s measures included absorbing specified hedging costs for banks raising FCNR(B) deposits and allowing lending against the mobilised funds.
Report By
View Reporter News