RBI Governor Sanjay Malhotra says FCNR(B) incentive scheme will run its full term

Reserve Bank of India Governor Sanjay Malhotra told a press conference on August 5 that there is no proposal to close the Foreign Currency Non‑Resident (Bank) – FCNR(B) – incentive scheme before its scheduled end. The scheme, which runs until September 30, 2026, has so far attracted about $36.7 billion in deposits, helping to strengthen the rupee amid rising global oil prices. Experts say the inflows could push India’s foreign‑exchange reserves past the historic $700 billion mark in the coming weeks.

The RBI’s zero‑cost swap facility remains in place through the scheme’s end, and the central bank said it would intervene only if the market experiences extreme volatility or speculative pressure. Major commercial banks, including State Bank of India and ICICI Bank, have attracted more than half of the total FCNR(B) investments. Recent regulatory changes have removed interest‑rate caps on new FCNR(B) and NRE deposits with tenors of three years or more, further encouraging foreign capital inflows.