The latest inflows have surpassed the earlier projection of $80 billion across the three schemes by a wide margin.
Capital inflows under the Foreign Currency Non-Resident (Bank), or FCNR(B), deposit scheme crossed the $100-billion mark by the August 31 deadline, according to official sources privy to the matter.
The Reserve Bank of India’s special swap window also attracted additional inflows through external commercial borrowings (ECBs) and overseas foreign currency borrowings (OFCBs), although the sources did not specify the latest amounts under these two categories.
While the FCNR(B) window closed on Monday, banks will be allowed to avail of the swap facility for deposits already contracted until September 11. While the swap deposits have a minimum maturity of three years and a maximum maturity of five years, most of the inflows came in the latter category.
The latest inflows have surpassed the earlier projection of $80 billion across the three schemes by a wide margin. The strong response also vindicated the RBI’s decision to shut the FCNR(B) window a month ahead of its original September 30 deadline, amid concerns over the reversal risks that could arise from excessive inflows.
The ECB and OFCB windows, however, will remain open until December 31, 2026. The special swap facility was operationalised on June 8, while FCNR(B) inflows began from June 23.
According to RBI data available until August 21, inflows under the three schemes stood at $72.85 billion, comprising $65.4 billion under FCNR(B), $4.86 billion through OFCBs and $2.59 billion via ECBs.
FE had reported on August 10 that the RBI was considering closing the FCNR(B) window, which offered attractive tax-free returns on dollar-denominated deposits by NRIs, well ahead of the September 30 deadline because of the stronger-than-expected response.
In an interview with FE after the decision to close the window early, RBI Governor Sanjay Malhotra described the move as a “well-thought-out, calibrated, prudent and data-driven” response to evolving conditions.
The FCNR(B) inflows could provide a significant boost to India’s balance of payments in the current financial year, despite an $8-billion depletion in forex reserves during the April-June quarter. Estimates suggest the capital account surplus for the year could rise above $65 billion, reversing the deficits seen over the previous two financial years.
“There is a diminishing marginal utility of every dollar that is swapped. At the same time, there is an increasing marginal cost because you need to sterilise it for a longer period,” Malhotra had said.
The substantial inflows through these routes has provided the RBI with significant firepower to defend the rupee aggressively. The rupee has appreciated for a fourth consecutive session on Tuesday, rising 22 paise to 94.95 against the dollar due to intervention by the central bank. Amid the West Asia war, the rupee had touched a record low of 96.96 per US dollar in May 2026.
“The RBI’s successful mobilisation of FCNR deposits lends a very strong level of support for the balance of payments, and also provides a floor for the Indian rupee vis-à-vis the US dollar,” Chief Economic Adviser V Anantha Nageswaran said on Monday.
The foreign currency assets received through the swaps would be reflected as foreign currency assets on the RBI’s balance sheet, potentially providing a further boost to the country’s forex reserves. India’s foreign exchange reserves had climbed to a record $729.33 billion in the week ended August 21.
This article was first uploaded on September two, twenty twenty-six, at twenty-five minutes past five in the morning.
© The Indian Express (P) Ltd
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