RBI brings forward deadline for banks to raise FCNR deposits after strong response
The move follows $56.846b in foreign currency inflows under the special swap facility
The Reserve Bank of India has moved up the deadline for banks to mobilise foreign currency deposits from non-resident Indians, after the scheme attracted more than $56 billion in inflows.
The RBI said on Friday that banks will now have until August 31, 2026, to raise Foreign Currency Non-Resident (Bank), or FCNR(B), deposits under its special foreign exchange swap facility.
The deadline was originally September 30. However, banks can still enter into dollar-rupee swaps with the RBI against these deposits until September 11.
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The central bank said the change followed a strong response to the facility and significant foreign currency inflows.
The special swap facility was introduced on June 8 to encourage inflows through FCNR(B) deposits, Overseas Foreign Currency Borrowings (OFCBs) and External Commercial Borrowings (ECBs).
As of August 13, total inflows through the three channels had reached $56.846 billion, according to RBI data.
FCNR(B) deposits made up the largest share, at $52.3 billion. OFCBs brought in $2.805 billion, while ECBs accounted for another $1.741 billion.
ECB and OFCB windows remain open
The RBI had initially allowed authorised dealer banks to carry out the dollar-rupee swaps against eligible inflows until October 16. The revised timeline brings forward only the deposit mobilisation deadline for FCNR(B) deposits.
The swap facility for FCNR(B) deposits will remain available until September 11, giving banks additional time to complete the related transactions after the deposit-raising window closes.
The central bank said the decision to end mobilisation earlier was based on the “encouraging response” to the FCNR(B) facility and the resulting foreign currency inflows.
The timelines for the other two channels have not changed. Banks can continue to mobilise funds through ECBs and OFCBs under the facility until December 31, 2026.
The RBI’s move therefore affects only FCNR(B) deposits, while the existing arrangements for overseas foreign currency borrowings and external commercial borrowings remain in place.
