India's RBI mobilises $65‑70bn in FCNR(B) deposits to bolster rupee

The Reserve Bank of India (RBI) has launched a special concessional swap facility to attract Foreign Currency Non‑Resident (Bank) [FCNR(B)] deposits. SBI Research estimates that the scheme could bring in between $65 billion and $70 billion in FCNR(B) deposits by 30 September, with total foreign inflows – including overseas borrowings – reaching $80‑$85 billion.

By 17 July, banks had mobilised roughly $20 billion under the scheme, of which about $17.4 billion were FCNR(B) deposits. According to Dr Soumya Kanti Ghosh, Group Chief Economic Adviser at State Bank of India, “We now estimate that FCNR(B) since then has already crossed the 2013 level of $26 billion in just 45 days.” Public‑sector banks are the main drivers of the mobilisation, and the RBI expects many deposits maturing in August‑September to be renewed under higher interest rates.

RBI Governor Sanjay Malhotra said the inflows would strengthen India’s balance of payments and support currency stability, even as the rupee continues to face pressure from external shocks.