India raises $73 bn in forex inflows at record pace
India mobilised $73 billion in foreign exchange inflows in under 11 weeks through a special RBI dollar-rupee swap facility, official data showed
Of this, FCNR(B) deposits alone accounted for around $65.4 billion, reflecting a strong Non-Resident Indian (NRI) response to the scheme
The pace and scale surpassed the RBI's 2013 FCNR(B) swap scheme, which had mobilised roughly $34 billion over a longer period during that year's currency stress
Given the inflows already exceeding expectations, the RBI moved up the closing date of the current FCNR(B) window from September 30 to August 31, 2026
FCNR(B) Deposits and the RBI Swap Window Mechanism
Foreign Currency Non-Resident (Bank) deposits, or FCNR(B), allow Non-Resident Indians to hold fixed deposits in foreign currency (such as USD) with Indian banks, insulating depositors from rupee depreciation risk since both principal and interest are denominated and repatriated in the foreign currency. In a special "swap window," the RBI offers banks a preferential, below-market swap rate to convert the foreign currency raised via FCNR(B) deposits into rupees, incentivising banks to aggressively mobilise such deposits and directly boosting India's forex reserves and capital account inflows.
Key Details
- FCNR(B) deposits are exempt from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements, making them attractive for banks to mobilise
- The special swap window is a temporary RBI facility (not a permanent feature), activated during periods of rupee pressure or global monetary tightening
- FCNR(B) deposits accounted for approximately $65.4 billion of the $73 billion mobilised in the current 2026 round, with the remainder from Overseas Foreign Currency Borrowings (OFCB) and External Commercial Borrowings (ECB) swap windows
The current $73 billion inflow was driven predominantly through this FCNR(B) swap mechanism, mirroring but far exceeding the scale of the 2013 precedent.
The 2013 FCNR(B) Swap Scheme — Precedent and Comparison
In 2013, during the "taper tantrum" triggered by anticipated US Federal Reserve monetary tightening, the rupee fell sharply and the RBI (under its then-Governor) launched a special FCNR(B) swap window offering a fixed, subsidised swap rate to banks. That scheme mobilised roughly $34 billion in total (including FCNR(B) deposits and overseas borrowings by banks) over about three months, stabilising the rupee and easing external financing pressure at the time.
Key Details
- 2013 scheme launched shortly after the new RBI Governor took charge in September 2013, amid a sharp rupee depreciation
- Total inflows mobilised in 2013: approximately $34 billion (FCNR(B) deposits contributed close to $26 billion of this)
- The 2026 scheme mobilised $73 billion in under 11 weeks — a faster pace and larger absolute scale than the 2013 episode
The 2026 scheme is explicitly framed by the finance ministry as surpassing the 2013 precedent in both scale and speed, making it India's largest such currency-mobilisation effort to date.
Forex Reserves, Balance of Payments, and the Capital Account
Foreign exchange reserves are a country's holdings of foreign currency assets, gold, Special Drawing Rights (SDRs), and its Reserve Tranche Position with the IMF, managed by the RBI to meet balance of payments needs and maintain currency stability. Large NRI deposit inflows such as FCNR(B) mobilisation are recorded under the capital account of India's Balance of Payments (BoP), directly augmenting forex reserves without adding to the current account (trade) deficit.
Key Details
- India's BoP has two main accounts: the current account (trade in goods/services, income, remittances) and the capital account (investments, loans, deposits)
- FCNR(B) inflows are a capital account item, classified as NRI deposits under "banking capital"
- RBI publishes forex reserves data weekly; reserves are held in the form of foreign currency assets, gold, SDRs, and the IMF Reserve Tranche Position
The $73 billion FCNR(B)-driven surge is a capital account inflow that directly strengthens India's forex reserves and rupee stability, functioning as a policy tool similar to its 2013 predecessor.
- Total forex inflows mobilised via the 2026 RBI swap facility: $73 billion in under 11 weeks (as of August 21, 2026)
- FCNR(B) deposits' share of the $73 billion: approximately $65.4 billion
- 2013 FCNR(B) swap scheme total mobilisation: approximately $34 billion (FCNR(B) deposits alone: approximately $26 billion) over roughly three months
- FCNR(B) window closing date moved up: from September 30 to August 31, 2026
- FCNR(B) deposits are exempt from CRR and SLR requirements