RBI forex swap inflows top $143.5 bn, FCNR(B) deposits near $133 bn | Finance News
The Reserve Bank of India (RBI) on Monday said inflows through its concessional forex swap window, operationalised on June 8, had topped $143.5 billion as of September 18 across FCNR(B) deposits, overseas foreign currency borrowings (OFCBs) and external commercial borrowings (ECBs), with FCNR(B) deposits accounting for the bulk of the inflows at nearly $133 billion.
OFCBs and ECBs mobilised under the RBI’s concessional swap window stood at $5.32 billion and $5.3 billion, respectively, as of September 18.
The FCNR(B) mobilisation figure is as of August 31, when the window for mobilising fresh deposits closed. Earlier, the RBI had said on September 2 that banks had mobilised a little over $127 billion through FCNR(B) deposits under the scheme by August 31.
The FCNR(B) deposit mobilisation figure rose as the RBI had allowed banks to avail of the swap facility with the central bank until September 11, 2026, for deposits mobilised up to August 31.
The central bank had operationalised the concessional forex swap to attract foreign currency inflows into the banking system and initially kept the FCNR(B) window open until September 30.
However, it closed the window a month earlier for FCNR(B) deposits following the strong response from banks. The strong mobilisation was driven partly by banks offering higher interest rates to attract FCNR(B) deposits. Some banks also offered leverage against such deposits, allowing non-resident Indians (NRIs) to potentially enhance returns on their investments.
The mobilisation was significantly higher than market estimates of $90-100 billion.
Although the RBI’s concessional swap window for FCNR(B) deposits closed on August 31, the window remains open for OFCBs and ECBs until December 31.
