3 min readUpdated: Sep 22, 2026 06:27 AM IST
The Reserve Bank of India’s (RBI’s) special US dollar-rupee forex swap facility has attracted $143.596 billion in foreign currency inflows till September 18, with Foreign Currency Non-Resident (Bank), or FCNR(B), deposits accounting for the overwhelming share of the mobilisation.
According to the RBI, latest data reported by authorised dealer banks show that FCNR(B) deposits mobilised under the facility stood at $132.98 billion, while Overseas Foreign Currency Borrowings (OFCBs) brought in $5.32 billion and External Commercial Borrowings (ECBs) $5.296 billion.
The facility, introduced by the central bank on June 8, was aimed at encouraging fresh foreign currency inflows into the banking system, strengthening the country’s external buffers and supporting domestic liquidity. Under the arrangement, banks could mobilise fresh three-to-five-year FCNR(B) deposits and swap the foreign currency with the RBI at a concessional rate, thus reducing hedging cost for banks.
The RBI decided to close the window for fresh FCNR(B) deposits on August 31, a month ahead of its original September 30 deadline, citing the “encouraging response”. Swaps against deposits already mobilised could be undertaken with the RBI until September 11.
The latest figures show that FCNR(B) mobilisation continued to build substantially before the window closed. The $132.98 billion raised through FCNR(B) deposits alone is several times the roughly $26 billion mobilised under the similar 2013 scheme launched during a period of intense pressure on the rupee.
The FCNR(B) deposits can be maintained by non-resident Indians, Overseas Citizens of India and Persons of Indian Origin in designated foreign currencies, including the US dollar, pound sterling, euro, Japanese yen, Australian dollar and Canadian dollar.
The RBI had also extended concessional swap arrangements to eligible ECBs and OFCBs. Unlike the FCNR(B) window, these facilities remain open until December 31, 2026.
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The central bank’s move was part of a broader package announced in June to encourage foreign capital inflows and ease pressure on rupee. The RBI had also relaxed rules to facilitate overseas borrowing by state-owned enterprises, while other measures were announced to encourage foreign investment in Indian debt markets.
The surge in inflows has strengthened the external-financing cushion available to the Indian banking system. RBI Governor Sanjay Malhotra had said in August that the robust flows further fortified India’s external position, while maintaining that the central bank does not target any particular exchange rate for the rupee.
The latest data underline the unprecedented scale of RBI’s 2026 forex mobilisation exercise, with the three windows together drawing nearly $144 billion of foreign currency inflows by September 18.
Given the swap arrangement, these inflows will add to an already abundant rupee liquidity backdrop, which was at a four-year high this month, depressing overnight rates. While organic drivers such as tax-related outflows, and seasonal currency leakage, in addition to CAD (1.1% of GDP), portfolio outflows and maturity of the forwards book will act as counter-balancing factors, yet concerted steps will be required to drain the potential surge in liquidity, said an analyst.
