India’s finance ministry said Finance Minister Nirmala Sitharaman met managing directors and chief executives of public sector banks and public financial institutions in New Delhi on July 13 to review progress on Reserve Bank of India swap-facility schemes covering foreign currency non-resident bank, or FCNR(B), deposits, as well as external commercial borrowing and overseas foreign currency borrowing initiatives. She asked banks to increase mobilisation during the remaining eligibility windows.
According to the ministry, banks reported interest from non-resident Indians in Singapore, Hong Kong, West Asia, the UK, the US and other jurisdictions. Banks were asked to intensify targeted outreach, including through digital channels, and to make greater use of International Financial Services Centre and GIFT City international banking units. The ministry said FCNR(B) mobilisation was showing an accelerating trend and cited encouraging response across FCNR(B), ECB and OFCB channels.
RBI’s FCNR(B) swap facility, announced on June 8, applies to fresh deposits with tenors of three to five years raised in freely convertible currencies, with the swap available only in US dollars and aligned to the underlying deposit tenor. A separate daily reporting system introduced on June 19 requires banks to submit data on FCNR(B), ECB and OFCB mobilisation each day.
Fresh FCNR(B) deposits are eligible under the scheme through Sept. 30, 2026, with the swap window open until Oct. 16 for eligible deposits mobilised by that date, while ECB and OFCB windows run through Dec. 31, 2026. The RBI has also provided pricing flexibility on fresh FCNR(B) deposits under the scheme, and deposits mobilised through Sept. 30 are exempt from cash reserve ratio and statutory liquidity ratio requirements. The policy push follows a period of rupee weakness, with the World Bank reporting that the currency depreciated by an average 5% year on year over April 2025 to March 2026 and fell to 94.7 per US dollar at end-March.