FCNR(B) window to close early after strong show
The Reserve Bank of India (RBI) has decided to end its special forex swap facility for FCNR(B) deposits ahead of schedule due to the facility's strong response. As of August 13, the three channels generated a combined $56.846 billion in forex inflows, with FCNR(B) deposits contributing the largest share. However, the facility will now only be available for FCNR(B) deposits accumulated until August 31, with swap arrangements against these deposits to be made with the RBI until September 11.
The RBI introduced the USD-INR forex swap facility on June 8 to lure non-resident Indian deposits and promote banks and state-run entities to access cheaper dollar funding. Despite the scheme's closure, ECBs and OFCBs will continue to be available until December 31, 2026. In addition to the FCNR(B) scheme, India's banking system saw a significant deposit surge, with total deposits reaching a record Rs 269.4 trillion, largely due to the conversion of dollar inflows under the RBI's FCNR(B) scheme.
Written by urgent.news from The Economic Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
