[REVISION HISTORY]

India RBI manages liquidity surplus and FCNR(B) inflows

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2026-10-05 06:25 UTC → 2026-10-21 05:03 UTC · added ~~removed~~

In July 2026, India's foreign-exchange reserves rose significantly, reaching $682.235 billion by July 24. This growth was supported by a $4.51 billion gain in foreign currency assets and increased gold holdings, driven largely by the RBI's special concessional swap facility for Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits. Following a surge in participation, the RBI moved the FCNR(B) mobilization deadline forward to August 31, 2026. By the close of the facility, the scheme had mobilized $127.2 billion in FCNR(B) deposits. As of September 18, 2026, the RBI has mobilized a total of $143.59 billion through its special forex swap windows. Recent data from the RBI shows that NRI deposit inflows surged to $36.24 billion during the first four months of FY27, a 678.2 per cent year-on-year increase. This was primarily driven by FCNR(B) inflows, which reached $34.53 billion between April and July FY27, compared to $772 million in the previous year. Conversely, Non-Resident External (NRE) deposit inflows moderated to $207 million. Total outstanding NRI deposits reached $200.89 billion by July 2026. Individual banks have also seen significant impacts from these schemes. HDFC Bank reported a 19% year-on-year increase in total deposits for the July-September quarter, reaching ₹33.27 lakh crore, with ₹1.10 lakh crore ($11.5 billion) attributed to FCNR-B deposits. During the same period, ICICI Bank raised $17.88 billion in FCNR-B deposits and $3.55 billion through dollar bond issuances. However, major lenders including ICICI, HDFC, and Axis Bank have faced pressure on net interest margins (NIMs) and CASA ratios following the mobilization of a combined $40 billion through these accounts. Analysts suggest margins may recover by Q4 FY27 as funds are deployed into higher-yielding assets.

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