Reserve Bank of India advances FCNR(B) deposit window closure to August 31

The Reserve Bank of India (RBI) has unexpectedly announced the early closure of its special Foreign Currency Non-Resident (Bank) [FCNR(B)] deposit mobilization facility. Originally scheduled to run until September 30, 2026, the window will now close on August 31, 2026.

Analysts suggest the decision follows a robust response to the scheme, which has already attracted significant foreign currency inflows. As of mid-August, FCNR(B) deposits reached approximately $52.3 billion, with total inflows through broader forex facilities totaling roughly $56.8 billion. Some reports estimate total collections could reach between $75 billion and $85 billion by the new deadline.

The early termination is viewed by experts as a cost-benefit recalibration. While the scheme successfully bolstered banking-system liquidity and strengthened the balance of payments, it also created future external liabilities and hedging costs for the central bank. Analysts from SBI Research and CareEdge Ratings indicate that the substantial funds already mobilized should sufficiently support bank liquidity and financial stability despite the shortened timeframe.